The Securities and Exchange Commission (SEC) and the Department of Justice are reportedly investigating allegations of insider trading in connection with Microsoft’s $68.7 billion purchase of Activision Blizzard.
As reported by The Wall Street Journal (via Forbes), it’s claimed that tycoons Barry Diller, David Geffen, and Alexander von Furstenberg each broke insider trading laws by purchasing Activision Blizzard call options shortly before the company was purchased by Microsoft.
It’s reported that all three bought call options to buy Activision Blizzard shares at $40 on January 14, 2022, which was just four days before Microsoft agreed to purchase the Call of Duty publisher at $95 per share.
As a result of the move, Diller, Geffen, and von Furstenberg reportedly generated unrealized profits of roughly $60 million. In a statement handed to Forbes, Diller refuted the allegations and said neither he, nor Geffen and von Furstenberg, had any knowledge of the impending Microsoft deal when they purchased their call options.
“None of us had any knowledge from any person or any source or any anything about a potential acquisition of Activision by Microsoft,” said Diller, in a statement sent through his media company, IAC.
“We acted simply on the belief that Activision was undervalued and therefore had the potential for going private or being acquired. And, if we had any such information we would never have traded on it — it strains credulity to believe we would have done so three days before Microsoft and Activision made their announcement.”
According to the Wall Street Journal, all three were reported to law enforcement by JPMorgan Chase, the investment bank which helped facilitate their respective transactions.