Federal prosecutors and securities regulators are investigating the options billionaires Barry Diller and David Geffen took on Activision Blizzard stock in January, just days before the video game maker agreed to Microsoft’s acquisition. That reports The Wall Street Journal†
The ‘socialite’ Alexander von Furstenberg, son of fashion designer Diane von Furstenberg, is also being investigated for this reason.
Diller, Geffen and Von Furstenberg posted unrealized profits of about $60 million (€55 million) on their transactions. Just before the takeover, the three took options to buy Activision shares for 40 dollars (about 36.50 euros) each. The share rose significantly after the takeover. Currently, the exchange rate fluctuates around 80 dollars (about 73 euros).
The prosecution is investigating whether the transactions violated insider trading laws, while the SEC is conducting a separate civil investigation into insider trading, the newspaper reports.
According to Diller, none of the three men, who know each other privately, had “non-public information about the Microsoft acquisition,” he told the paper. “It was just a lucky guess. We acted on no information from anyone.”
Diller is chairman of media conglomerate IAC and the Expedia Group, among others, and is married to Diane von Furstenberg. Geffen is best known as the founder of film distributor DreamWorks and several record labels, including DGC Records. Diller and Geffen are both prominent Democratic Party donors.
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