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 p.l.c. agreed to acquire TravelCenters of America Inc.
This is the second insider trading case the SEC has brought in connection with trading ahead of the announcement of BP’s acquisition of TravelCenters.
According to the SEC’s complaint, Crotty misappropriated material, nonpublic information from a BP colleague who was working on the acquisition.
The SEC alleges that after learning that it was highly likely that the deal would close, Crotty purchased 848.824 shares of TravelCenters stock on February 15, 2023. The following day, TravelCenters announced the acquisition, which triggered a 70.8% increase in TravelCenters share price and generated for Crotty an unrealized gain of $30,667.
The SEC’s complaint, filed in U.S. District Court for the Northern District of Illinois on April 26, 2024, charges Crotty with violating the antifraud 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 the court’s approval. Without denying the allegations in the SEC’s complaint, Crotty has agreed to consent to the entry of a final judgment permanently enjoining him from future violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, imposing an officer and director bar, and ordering him to pay disgorgement of $30,667, prejudgment interest of $1,274.50, and a civil penalty of $30,667.
In a parallel action, the U.S. Attorney’s Office for the Northern District of Illinois filed criminal charges against Crotty.
