A former vice president of theScore who shared insider trading information about the company’s takeover by PENN Entertainment in 2021 has settled with the Ontario Securities Commission (OSC) for around $600,000.
The OSC announced on Tuesday that ex-Score Media and Gaming VP of Finance Huy Le (Alvin) Huynh has agreed to pay a penalty of $325,000, disgorgement of $270,000 and $40,000 towards the cost of the OSC’s investigation as part of a settlement agreement. He has also been banned for seven years from trading securities or derivatives, subject to personal carve-outs, and from working as a director and officer at any company for the same length of time.
VP and wife involved CPA in scheme
Per an agreed statement of facts outlined in the settlement agreement, Huynh learned of PENN’s pending US$2 billion takeover of theScore in early July 2021, about a month before it was publicly disclosed. He shared the information with his wife before it was public, knowing that he was not permitted to do so.
He used his wife’s friend, a chartered professional accountant named Jessica Tam, as an intermediary, instructing her to buy 304 theScore call options for less than US$7,000 through her tax-free savings account in late July and early August 2021. On Aug. 6, the day after PENN’s takeover was announced publicly, Huynh told Tam to sell all 304 Score call options in Tam’s TFSA for US$318,800, more than 45 times the buy price. That resulted in trading profits of approximately US$311,000.
Huynh and Pham used coded messages to coordinate staggered payments with Tam in an attempt to avoid arousing suspicion, said the agreed statement of facts in the settlement document. They ultimately received $270,000 of the proceeds in cash.
Huynh admitted to insider trading and tipping in violation of the Securities Act, while Pham admitted to conduct contrary to the public interest. Both spouses cooperated with the OSC investigation. In addition to Huynh’s punishment, Pham agreed to pay $10,000 towards the cost of OSC’s investigation and is banned from trading securities or derivatives or working as a director or officer for three years, with certain exemptions. There were no allegations against Tam.
“This settlement reinforces the critical importance of upholding market integrity,” said OSC EVP of Enforcement Bonnie Lysyk. “Insider trading undermines investor confidence and the fairness of our capital markets. This case sends a clear message that those who misuse confidential information for personal gain will be held accountable.”
PENN keeping Score
PENN completed its acquisition of Toronto-based legacy sports media brand theScore from founder John Levy and his family in October 2021. It withdrew the company’s betting app, theScore Bet, from the U.S. in July 2022 to focus it on the then-new Ontario market, and has retained it as its sole Canadian-facing online sports betting and online casino brand. This summer, PENN cut back theScore’s sports content newsroom that had grown over the years, eliminating more than 75 positions.
PENN CEO CEO Jay Snowden said earlier this year that Ontario is PENN Interactive’s number-one North American market in terms of revenues, gross profit and contribution margin. He suggested last year that theScore Bet has a double-digit market share in a province with 50 licensed commercial iGaming operators.
