- US regulators are looking into possible insider trading by Barry Diller and two others over Activision shares before its acquisition by Microsoft, WSJ reported.
- The SEC and DOJ are investigating options trades that IAC Chairman Diller, Alexander von Furstenberg, and David Geffen made.
- Diller denied that he had access to any inside information about the Microsoft-Activision deal.
US regulators are investigating large options trades in Activision Blizzard shares by Barry Diller and two others days before Microsoft announced its takeover of the video-game giant in January, the Wall Street Journal reported Tuesday.
The Securities and Exchange Commission and Department of Justice launched separate probes into possible insider trading.
IAC/InterActiveCorp Chairman Diller, his stepson Alexander von Furstenberg, and music mogul David Geffen bought options to purchase Activision shares at $40 each on January 14, a few days before Microsoft agreed to buy Activision for almost $70 billion on January 18.
The three spent around $108 million on the right to buy 4.12 million Activision shares. The options are now valued at $168 million and they have an unrealized profit of $60 million based on Activision's current share price of around $80, WSJ estimated.
In an email to Insider, IAC quoted Diller saying, "None of us had any knowledge from any person or any source or any anything about a potential acquisition of Activision by Microsoft. 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 3 days before Microsoft and Activision made their announcement."
As well as being von Furstenberg's step father, Diller is also close friends with music mogul and DreamWorks Pictures co-founder Geffen.
The options trades were arranged privately through JPMorgan. The bank reported the trades to legal authorities after the Microsoft-Activision deal was announced, the WSJ reported.
It's not just these three whose Activision-related investments have raised eyebrows. Last month, billionaire investor Warren Buffet denied that he or his team had any knowledge of the deal when Berkshire Hathaway bought a nearly 2% stake in Activision in October and November.
In January, Microsoft announced its acquisition of Activision, the major video-game publisher famous for its "Call of Duty" franchise, in an all-cash deal valued at about $68.7 billion.
This would be Microsoft's largest-ever acquisition and the largest acquisition of a video-game company in history. The announcement sent Activision shares surging 26% on January 18.