The Securities and Exchange Commission (SEC) has charged Chicago-area resident Kevin Crotty with insider trading ahead of a February 16, 2023 announcement that BP plc has agreed to acquire TravelCenters of America Inc.
This is the second insider trading case the SEC has brought in connection with transactions prior to the announcement of BP’s acquisition of TravelCenters.
According to the SEC complaint, Crotty misappropriated material, non-public information from a BP colleague who was working on the acquisition.
The SEC alleges that after learning that the deal was likely to close, Crotty purchased 848,824 shares of TravelCenters on February 15, 2023. The next day, TravelCenters announced the acquisition, which caused a 70.8% increase in its stock price TravelCenters and created for Crotty an unrealized gain of $30,667.
The SEC’s complaint, filed in the U.S. District Court for the Northern District of Illinois on April 26, 2024, charges Crotty with violating the anti-fraud provisions of Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and rule 10b -5 thereunder.
Crotty has agreed to settle the SEC’s charges, and the settlement is subject to court approval. Without denying the allegations in the SEC’s complaint, Crotty agreed to consent to the entry of a final judgment that would permanently indemnify him from future violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, imposing an officer’s bar and director , and ordered him to pay restitution of $30,667, prejudgment interest of $1,274.50, and a civil penalty of $30,667.
In parallel action, the US Attorney’s Office for the Northern District of Illinois filed criminal charges against Crotty.