(Reuters) – U.S. authorities are investigating whether an options trade in Activision Blizzard Inc violated insider-trading laws as it followed a meeting between CEO Bobby Kotick and one of the traders, the Wall Street Journal reported on Thursday.
The options trade was arranged days before Microsoft Corp said it would buy the “Call of Duty” maker for $95 a share, and it generated an unrealized profit of about $59 million, the report said, citing unnamed sources.
Kotick and the trader, Alexander von Furstenberg, met the week before von Furstenberg, along with media moguls Barry Diller and David Geffen, bought options to purchase Activision shares at $40 each on Jan. 14, according to the report. (https://on.wsj.com/36L1OJx)
“Mr. Kotick had a social brunch with his friends at a popular restaurant. He, of course, didn’t share any information with them regarding a possible transaction with Microsoft,” a spokesperson for Kotick told Reuters.
The U.S. Department of Justice and the Securities and Exchange Commission (SEC) are both separately conducting insider-trading investigations, the WSJ report said.
A spokesperson for the Justice Department declined to comment. An SEC spokesperson also declined to comment, saying the agency “does not comment on the existence or nonexistence of a possible investigation”.
Diller previously told WSJ that none of the traders had material non-public information about the deal, the report said.
(Reporting by Leroy Leo in Bengaluru and Chris Prentice in Washington; Editing by Devika Syamnath)