The United States Department of Justice and the Securities and Exchange Commission are looking into trades made by three close associates of Blizzard Activision CEO Bobby Kotick days before the company was bought out by Microsoft, The Wall Street Journal reported on Tuesday.
Three Bobby Kotick Associates accused of Insider Trading
The deal between Microsoft and Blizzard Activision is the largest purchase in the gaming sector with a $68.7 billion price tag. Microsoft paid $95 per share in the all-cash transaction to move the gaming giant into its fold. But approximately four days before the transaction, three individuals with ties to Activision Blizzard’s CEO purchased a large number of Activision Blizzard shares.
The United States Justice Department and the Securities and Exchanges Commission are running individual investigations on the stock trades of three specific individuals. Producer and film studio executive David Geffen, Fox co-founder Barry Diller, and investor Alexander von Furstenberg are said to have purchased 4.14 million Activision Blizzard shares, valued at around $108 million, four days before the Microsoft acquisition was announced in January. In the report by the Wall Street Journal, the three individuals were said to have made $60 million in profits through the trade.
According to a report made by gamesindustry.biz, Diller served alongside Kotick on the board of directors of Coca Cola together. Geffen previously worked with Diller at talent agency William Morris. Finally, Diller is also married to Diane von Furstenberg, Alexander von Furstenberg’s mother.
According to the Wall Street Journal, The US Justice Department is “looking into whether any of the options trades violated insider-trading law” while the Securities and Exchange Commission runs its own investigation. The timing of the trade seems too coincidental and has sparked an investigation.
Diller told the Wall Street Journal the trades were “simply a lucky bet,” and that the three parties “acted on no information of any kind from anyone” and was merely “one of those coincidences.”
