SEC Files Complaint Against Digital Sportsbook Trading Case

The Securities and Exchange Commission (SEC) filed a complaint against David Roda and Andrew Larkin, alleging the two engaged in insider trading. According to the complaint, Roda learned that the parent company, Penn National Gaming Inc., of his employer, Penn Interactive, was in negotiations to acquire Score Media and Gaming Inc.(SCR); Roda’s supervisor warned him against sharing this information and insider trading.

However, leading up to the announced transaction Roda allegedly bought 500 SCR option call contracts. Roda also purportedly tipped off Larkin on an encrypted messaging app about the insider trading opportunity. On August 5, 2021, the day Penn National and SCR announced the acquisition, SCR’s stock shot up 80% and Roda and Larkin sold all of their holdings, per the agency.

Scott A. Thompson, Co-Acting Regional Director of the SEC’s Philadelphia Regional Office said in a press release that “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. 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.”

The plaintiff seeks the following relief: an injunction preventing the defendants from engaging in conduct violating the Securities Exchange Act, the disgorgement of the defendants’ ill-gotten profits, and the defendant to pay civil penalties.