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Gaming Guru

Tim O'Reiley

Former Shuffle Master exec agrees to pay civil penalty related to insider trading

5 June 2012

Former Shuffle Master, Inc. senior vice president R. Brooke Dunn agreed on Thursday to pay a $181,594 civil penalty to settle charges that he improperly fed a friend insider information about the company.

In addition, stage show producer Nicholas Howey, who had known Dunn since the early 1990s, agreed to pay a total of $393,591, including disgorgement of profits, a civil penalty and interest. The Securities and Exchange Commission brought the insider trading case against both of them in November 2009.

Under terms, neither Dunn nor Howey admitted wrongdoing. Dunn also agreed not to serve as an officer or director of an SEC-registered company for an indefinite term. The company said he "ceased his full-time employment" at the end of 2008, as the SEC investigated the case.

According to the complaint, Dunn, a Henderson resident, joined Shuffle Master in 1996. He knew Howey, whose private company produced the stage version of "101 Dalmations," among other shows.

In early 2007, Dunn privately let Howey know about a joint venture with International Game Technology, with the expectation that it would boost the stock price. Shortly thereafter, the price began to drop and Dunn told Howey about a disappointing earnings report prior to its release.

The SEC asked for Howey to disgorge profits and losses he avoided due to the information from Dunn he received prior to the general public.