Three Activision Blizzard investors are being reportedly investigated for insider trading, with the US government looking into their purchase of options days before the Call of Duty publisher was acquired by Microsoft for almost $69 billion.
Barry Diller, Alexander von Furstenberg, and David Geffen all purchased large options at $40 each in the days leading to the announcement, according to the Wall Street Journal who cited “people familiar with the matter”. The options were acquired on Jan. 14 while the share price was sitting around $63.
According to the WSJ, the three investors would have made around $60 million from their options. That figure could rise, however, as the options haven’t been executed and aren’t due to expire until 2023.
The government has launched two separate investigations into the matter. Alongside the Justice Department’s efforts, the Securities and Exchange Commission has launched a civil insider trading investigation into the options.
Speaking to WSJ, Diller claims that neither he nor the other two men had prior knowledge of Microsoft’s plans to acquire Activision Blizzard, calling it “one of those coincidences”.
According to Diller, Mr. von Furstenberg, who is his stepson, had been purchasing Activision-Blizzard stock before Jan. 14, believing that the company “would either go private or would be acquired at some point”.
The investigation comes after JPMorgan Chase, who facilitated the private transactions, reported them to law enforcement after Microsoft’s acquisition was announced on Jan. 18.
Microsoft’s acquisition of Activision Blizzard is reported to cost the company $68.7 billion, or $95 per share should it go ahead as planned.
The sale came after multiple accusations of workplace misconduct and sexual harassment at the company which drove the share price down in the latter months of 2021.