SEC charges broker with insider trading over theScore acquisition by PENN Entertainment
Stockbroker Jordan Meadow indicted on six counts of securities fraud over $2.2bn deal
A New York-based stockbroker has been indicted on six counts of securities fraud over alleged insider trading related to PENN Entertainment’s $2.2bn acquisition of theScore.
According to the Securities and Exchange Commission (SEC), in late 2020, stockbroker Jordan Meadow offered to provide a friend, named as Steven Teixeira, with luxury watches and other items of value in exchange for access to a work laptop belonging to Teixeira’s then-girlfriend, who was an executive assistant at an investment bank.
Documents on the laptop included confidential information about planned corporate acquisitions in which the unnamed investment bank served as an advisor.
In late July 2021, Teixeira accessed the laptop for the first time learning of the then Penn National Gaming’s impending acquisition of Score Media and Gaming for $2.2bn. He then shared the information with firstly a friend, before that information was provided to Meadow.
Meadow then used this information to purchase more than 769 call option contracts in SMG between August 2, 2021, and August 3, 2021, also advising colleagues, as well as a friend and his clients to purchase securities in the business.
Following the announcement of the deal on August 5, 2021, Meadow and other investors sold their call options for a combined profit of more than $5m.
Meadow and Teixeira also used confidential laptop information to purchase shares in a soon-to-be-acquired enterprise software company VMWare after learning of a $65bn sale.
Meadow, who was arrested on June 29, is charged with six counts of securities fraud, which carries a maximum sentence of 20 years in prison, as well as one additional count of securities fraud which carries a maximum prison sentence of 25 years.
The investigation into the alleged insider trading was carried out by the SEC, as well as the New York branch of the FBI, and the United States Attorney’s office for the Southern District of New York.
Meadow has also been charged with a further count of conspiracy, which carries a maximum jail sentence of five years.
Meadow’s fellow conspirator, Teixeira, has pleaded guilty to charges anything specific? as part of a cooperation agreement with the state.
The charges against both menfollow similar alleged insider trading relating to theScore deal by a former PENN employee, David Roda, in June 2022, with Roda also purchasing call options in advance of the $2.2bn deal being announced, in violation of US anti-trust laws.
Charges against Meadow and Teixeira were among those filed against 10 individuals for alleged insider trading across a number of businesses, charges which were confirmed in a release by the SEC on June 29.
In a statement confirming the charges, US Attorney for the Southern District of New York Damian Williams cautioned individuals against using insider information to profit from acquisitions and sales.
“Insider trading is not a quick buck. It’s not easy money. It’s not a sure thing. It’s cheating. It’s a bad bet. It’s a ticket to prison,” Williams said.
“Because my office, the Southern District of New York, is watching. And we’re working quickly to investigate and prosecute anyone who corrupts our financial markets. And we’ll keep at it as long as it takes. You can bet on that,” the Attorney concluded.