Penn National Gaming’s acquisition of Canadian company TheScore turned out to be a boon for more than just the Pennsylvania-based gaming company. According to a release from the Securities and Exchange Commission (SEC), former Penn Interactive employee David Roda purchased 500 shares of TheScore stock in the days leading up to the announcement.
When the two companies did announce the $2 billion acquisition last November, it made waves across the industry since it was positioning Penn to fully own and operate its tech stack. (To date, Kambi still powers Barstool Sportsbook.) The announcement sent TheScore’s stock soaring more than 80%.
Roda served as Director of Backend for Penn Interactive during the acquisition and, as the SEC attests, became aware of the deal before it was publicly announced. In breach of confidentiality, he both purchased shares and enlisted friend Andrew Larkin to buy an additional 375 shares. Per the release, Roda profited over $560,000, while Larkin pocketed over $5,000.
“As we allege in our complaint, Roda was entrusted by his employer with critical, market-moving information, and he betrayed that trust by using the information to trade and also tip his friend so they could both profit,” said Scott A. Thompson, Co-Acting Regional Director of the SEC’s Philadelphia Regional Office.
“When employees like Roda misappropriate and trade on confidential information, it erodes market confidence. The SEC remains committed to finding, investigating, and charging those who engage in insider trading.”
Both Roda and Larkin have agreed to pay disgorgements and other penalties related to the charges. Larkin did not concede guilt, but did agree to pay $11,000 in fines. The total amount of Roda’s payment will be determined at a later date.
The news comes hot on the heels of allegations of insider trading related to MGM Resorts International’s acquisition of Swedish company LeoVegas. Last week, LeoVegas said it was fully cooperating with Swedish authorities overseeing the investigation.