Three men stand accused of Activision insider trading after they purchased shares in Activision Blizzard before the acquisition of the company by Microsoft. The US Justice Department and the Securities and Exchange Commission are investigating whether insider trading laws were broken in the course of this transaction.
How execs would make $60-100 million through insider trading
With their connections to Activision Blizzard CEO Bobby Kotick, the three men – Barry Diller (a Coca-Cola board of director with Kotick), David Geffen (longtime friend of Diller), and Alexander von Furstenberg (Diller’s stepson) – purchased shares in Activision Blizzard on January 14, according to the Wall Street Journal. The acquisition deal of the company by Microsoft was only announced four days afterward.
All three men had made private transactions when they purchased shares in Activision Blizzard through JPMorgan Chase & Co for a total sum of $108 million. The share price skyrocketed after the acquisition was made. with the investment climbing to $168 million. So if their transactions were allowed to be finalized, they would pocket $60 million in profit, a figure that increases to $100 million in profit if they hold their shares until the Microsoft deal closes.
In response to the investigation, Diller has told the WSJ that there was no insider information involved:
“It was a simply a lucky bet. We acted on no information of any kind from anyone. It is one of those coincidences.”
It’s been difficult to track all the lawsuits Activision Blizzard now faces. In addition to this one for Activision insider trading, the more prevalent and now infamous lawsuit by the California Department of Fair Employment and Housing against the company for gender discrimination is still ongoing. Activision Blizzard is also embroiled in another lawsuit by the parents of Kerri Moynihan, who they believe committed suicide due to the company’s hostile work environment.
In other news, Microsoft is the publisher of the year according to Metacritic and the latest Xbox Insider Ring update disables Twitter sharing for game clips.
