Federal prosecutors and the Securities and Exchange Commission have launched an investigation into three American billionaires on suspicion of insider trading following their purchase of Activision Blizzard, Inc shares three days before its acquisition by Microsoft Corp.
Barry Diller, chair of media group IAC, his stepson Alexander von Furstenburg, and musical tycoon David Geffen purchased a combined 41.2mln Activision shares for US$108mln in January, the Wall Street Journal (WSJ) reported.
Geffen is worth approximately US$10.3bn, while Diller has a net worth of US$4.5bn and von Furstenburg is worth US$10.1mln.
Diller said they were contacted by regulators but denied having any access to non-public information prior to the takeover.
“It was simply a lucky bet,” Diller told the WSJ, before adding “'We acted on no information of any kind from anyone. It is one of those coincidences.”
“If we had any such information, we would never have traded on it – it strains credulity to believe we would have done so three days before Microsoft and Activision made their announcement,” Diller told Bloomberg.
The trio insisted they bought the buy options because they thought Activision, which produces Call of Duty, World of Warcraft, and Candy Crush, was undervalued.
JP Morgan Chase first reported the buy options to law enforcement.
Diller was on the board of Coca-Cola with Activision chief executive Bobby Kotick, who he described as a “long-time friend.”
Kotick started negotiations with Microsoft in November, the WSJ said.