Insider Traders on Penn Entertainment Acquisition of Score Media Made $750K, Say Prosecutors

Article ByDavid Weir

July 6, 2023

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Posted in: US Gambling News, US Gambling Crime News

The Securities and Exchange Commission (SEC) has taken action against two individuals, accusing them of insider trading on a $2 billion gambling industry acquisition.

The pair have been charged with profiting more than $750,000 from gambling operator Penn National Gaming’s purchase of Canadian sports media firm Score Media (offices pictured) in 2021.

The individuals facing charges are Jordan Meadow, a representative for a New York-based broker-dealer, and Steven Teixeira, the chief compliance officer for a payment processing firm.

Teixeira is accused of accessing his partner’s laptop to gain insider information on the Penn purchase and others, as reported in the Wall Street Journal. The partner worked at a large investment bank.

Brazen Betrayal of Trust

The SEC alleges that Meadow and Teixeira violated federal securities laws’ anti-fraud provisions.

The charges stem from Teixeira’s alleged deceptive acquisition of “material non-public information” from his then-girlfriend’s laptop while she was employed at a major New York investment bank.

The pair were working from home in their New York apartment during the early part of the Covid-19 pandemic.

The confidential information pertained to potential mergers and acquisitions, including, prosecutors say, Penn Entertainment’s purchase of Score Media.

“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, associate regional director of the SEC’s Philadelphia Regional Office, in an official SEC release.

“We will continue to pursue and prosecute insider trading where appropriate to hold people accountable for their actions.”

80% Share Jump

According to the SEC, Teixeira made approximately $28,000 from his actions, while Meadow profited more than $730,000.

The pair are accused of profiting roughly $35,000 on their own shares from the Score Media deal.

However, the big money for the scheme came in when Meadow is alleged to have shared his insider knowledge with his brokerage clients.

60 of Meadow’s clients bought-in to the tune of $6 million and 300,000 shares in Score Media in the weeks before the sale to Penn.

When news of the deal broke, Score Media shares jumped 80% in one day.

That led to “millions of dollars” in profits for Meadow’s shareholding clients, on which he himself is alleged to have made several hundred thousand dollars in commissions.

Additional Charges

In addition to the SEC’s charges, the U.S. Attorney’s Office for the Southern District of New York has also filed separate criminal charges against Teixeira and Meadow.

This case serves as a reminder of the ongoing scrutiny and regulatory oversight in the gaming industry, particularly as it intersects with financial markets and securities law.

In fact, it hasn’t been the only story of insider trading relating to this one deal. Last year, a former Penn Entertainment senior back-end developer was charged with profiting from inside knowledge of the purchase.

David Roda profited more than $560,000 from his shares bought before the sale.

“When employees like Roda misappropriate and trade on confidential information, it erodes market confidence,” said Thompson, who also headed the investigation in that case.

“The SEC remains committed to finding, investigating, and charging those who engage in insider trading,”

Penn National Gaming completed its acquisition of theScore in October 2021, a deal that was announced in August of the same year.