David Roda, a 36-year-old Philadelphia man has been charged with insider trading from his time as an employee of Penn National Gaming. The programmer was based in Philly and worked for the brand providing online sports betting data. On Monday, Roda was charged with using information connected to the potential acquisition of Score Media to purchase stock, netting over $560,000 in the process.
Details of the Charges
Penn National is a casino and racetrack company with properties located across the United States. They are based in Pennsylvania. The company chose to employ Roda as director of backend architecture for Penn Interactive, its online subsidiary.
Back in March 2021, Penn National began negotiating with Score Media & Gaming concerning a potential acquisition of Score. By June, a few employees were asked to complete due diligence connected to the potential deal. Roda was included in the mix of employees.
Penn eventually purchased Score Media and Gaming for around $2bn. The deal was based on the company’s stake in the Barstool Sports brand, one that is utilized for sports betting and podcasting. By July, Roda decided to buy call option contracts connected to Score. A total of 200 contracts were purchased at $13,000.
By August, Roda was told that the acquisition would be happening in a few days. He then decided to purchase 300 more contracts for $7,000. With the call option, the investor has the ability to buy stock at a set price, which gives the investor a gain if the share increases.
Of course, once Penn announced the acquisition, the stock price jumped. The just over $20,000 spent by Roda was now worth over $581,000.
Tipping Off a Friend
Not only did Roda purchase the stocks to make a profit, but he told his old friend Andrew Larkin about the deal. After talking to Larkin about the potential acquisition, the two then discussed stocks and eventually purchased 375 shares of Score Media common stock.
While discussing the stocks, Roda told his friend to download an application with encrypted messaging so they could speak freely on the topic. Larkin ended up making $12,352, with a gain of $5,602 after the amount spent was subtracted.
Eventually, his actions were discovered, and Roda was let go from Penn National. The company announced in a statement that they take the matter seriously and continue to have policies and procedures in place to prevent this type of incident from occurring.
Roda now faces criminal charges and civil charges that were filed by the Securities Exchange Commission.