GameStop Corp (NYSE:GME) CEO Ryan Cohen has agreed to pay a nearly $1 million civil penalty to settle the US Federal Trade Commission’s claim he failed to report the acquisition of more than $100 million worth of Wells Fargo shares.
The Hart-Scott-Rodino Antitrust Act (HSR) requires companies and individuals to report large transactions including securities acquisitions over a certain threshold to the FTC and Department of Justice, allowing federal agencies to investigate these deals before closing.
Per the complaint, Cohen in 2018 acquired more than 562,000 Wells Fargo voting securities, triggering the obligation to file an HSR form with federal antitrust agencies before completing the acquisition. Cohen failed to file this form, violating the HSR Act, according to the complaint.
His acquisition was not exempt under the Investment-Only Exemption of the HSR Act, even though his stake represented less than 10% of Well Fargo’s outstanding voting securities.
“When acquiring the Wells Fargo shares Cohen intended to influence Wells Fargo’s business decisions as evidenced by Cohen’s emails when he advocated for a board seat,” the FTC said.
“After acquiring the shares, Cohen proceeded to have periodic communications with Wells Fargo’s leadership regarding suggestions to improve Wells Fargo’s business and to advocate for a potential board seat, according to the complaint.”
Cohen will pay $985,320 to settle the FTC’s charges.