The Securities and Exchange Commission (SEC) has charged two people with insider trading related to Penn National Gaming’s acquisition of theScore.
The charges were handed down against Jordan Meadow, a representative for a broker dealer based in New York, and Steven Teixeira, chief compliance officer for a payment processing company.
Specifically, both are accused of breaching the antifraud provisions of federal securities laws.
Both allegedly committed insider trading offences after Teixeira acquired what the SEC called “material non-public information” from his girlfriend’s laptop as she worked from home during the Covid-19 pandemic. His girlfriend worked at a New York-based investment bank.
The information detailed potential mergers and acquisitions, which the SEC says Teixeira used to “purchase call options on several issuers” ahead of the deals going public. Teixeira also allegedly tipped off friends to this, including Meadow.
“Brazen betrayals of trust”
The SEC says Teixeira made around $28,000 from the scheme, while Meadow made over $730,000.
Additionally, according to the complaint, Meadow also tipped off his brokerage customers to trades, which resulted in profits of “millions of dollars” for them. Meadow allegedly made several hundred thousand dollars in commissions from this.
“Our complaint alleges brazen betrayals of trust by Teixeira, who misappropriated information from his girlfriend’s laptop to make a quick buck, and by industry-veteran Meadow, who was all too eager to use the information to line his pockets,” said Scott Thompson, the associate regional director of the SEC’s Philadelphia Regional Office.
“We will continue to pursue and prosecute insider trading where appropriate to hold people accountable for their actions.”
Teixeira and Meadow were also handed separate criminal charges by the US Attorney’s Office for the Southern District of New York.
Penn completed its $2.0bn acquisition of theScore in October 2021, after announcing the deal in August that year.