Activision Stock Shenanigans Being Investigated By Justice Department, SEC

The Wall Street Journal is reporting that three men — Fox co-founder Barry Diller, Reggie Miller-hating socialite Alexander von Furstenberg and music magnate David Geffen — are currently under two separate federal investigations over suspicions insider trading was involved in their purchase of millions of dollars of Activision shares just before the company’s purchase by Microsoft.

The allegations are centred on the trio’s purchase of $US108 ($150) million in Activision Blizzard shares only days before the Microsoft sale was announced in January. Following the deal, those same shares are now worth approximately $US168 ($233) million, making the three men a quick profit of $US60 ($83) million.

The timing of the deal, the sums involved and one of the men’s personal connection to Activision Blizzard (more on that in a minute) are certainly suspicious. As a result, the Justice Department is “investigating whether any of the options trades violated insider-trading laws”, while the Securities and Exchange Commission “is separately conducting a civil insider-trading investigation”.

Of the three men Barry Diller is the central figure here, as he served alongside Activision CEO Bobby Kotick on the board of Coca-Cola. Or at least he did until Kotick recently “stepped down” from that role in the wake of historic allegations of abuse and harassment at Activision Blizzard. The two weren’t just occasional colleagues, either; Diller has called Kotick a “a long time friend”.

Diller is then in turn also very close friends with Geffen, while Diller is married to von Furstenberg’s mother, so you can see why the SEC and Justice Department have both decided to investigate the deals. And aren’t exactly having to work overtime to put the pieces together on the trio’s connections.

Speaking with the WSJ about the report, Diller said on record that “It was simply a lucky bet. We acted on no information of any kind from anyone. It is one of those coincidences”, while von Furstenberg told the paper he had been “buying Activision stock prior to that and the thought was that Activision at some point would either go private, or would be acquired at some point”.