Manager from LeoVegas Detained for Engaging in Insider Trading During $600M MGM Merger Agreement
Published on: November 14, 2022, 04:56h.
Last updated on: November 14, 2022, 06:59h.
A juicy scandal has rocked the world of online casinos with the arrest of a "top-tier" executive at LeoVegas and two others, suspected of insider trading, reports Swedish newspaper Aftonbladet.
Philip Conneller
LeoVegas' High Roller Detained
Two Lions Roar Together: The LeoVegas logo, left, and the MGM logo, right. Could the LeoVegas' belligerent mascot have led to reckless trading practices? (Image: Casino.org)
The LeoVegas executive is under fire for leaking privileged information about MGM Resorts International's staggering $600 million acquisition of LeoVegas before the news hit the streets.
@casinoorgphilc
Two unrelated individuals have also been swept up in the scandal, both of whom were apprehended along with the LeoVegas exec on November 10.
LeoVegas gets a taste of its own medicine: The company's press manager, Daniel Valiollahi, acknowledged the arrest of an employee but clarified that it was not a "board member or management team member."
Valiollahi emphasized that LeoVegas maintains high regulatory standards and has collaborated with authorities since June during their investigation into alleged insider trading activities.
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SEC's Springtime Raid
Sweden's Economic Crime Authority (SEC) raided LeoVegas' Stockholm offices on June 7, initiating a preliminary inquiry into potential insider trading involving the company's shares.
At the time, LeoVegas expressed its commitment to cooperating with SEC's investigation without any knowledge of criminal suspicions.
Gaming Business,
Insidious Gains
LeoVegas shares soared by 42% on news of MGM's acquisition offer on Monday, May 2. The surge can be both credited to the acquisition announcement and the stock's robust performance in the preceding weeks.
MGM's SEK61 (US$6.16) per share bid represented a 44% premium compared to LeoVegas' closing share prices from the previous Friday.
Regulation,
Alleged Cash Flow
The three suspects are believed to have benefited from trades worth millions during the sensitive period, Swedish prosecutor Pontus Hamilton informed Aftonbladet.
The possibility of exorbitant returns leaves one million Swedish Krona (approximately $95,000 U.S.) worth of transactions, suggesting a substantial spoil between three parties.
Tribal Gaming.
Stand Your Ground
All three suspects vehemently deny any involvement in illegal activities, their lawyers asserting that they hope for a swift resolution of the misunderstanding.
MGM's September Coup
Despite the insider trading rumors, MGM remained unfazed by the controversy. The iconic U.S. casino group closed the all-cash deal in September with an overwhelming 96% approval from LeoVegas shareholders.
MGM's leader, Bill Hornbuckle, took the chance to express his delight:
"We've pinned the tail on the digital gaming industry's donkey, and LeoVegas' team will be a major contribution to our quest for global online casino domination."
The newly merged entity now stands to become a powerful force in the digital gaming realm, with billions of dollars at stake.
Insider Sneak Peeks
Regardless of the outcome of the investigation, this scandal sheds light on the risks and high stakes of insider trading and the general cutthroat nature of the online gambling industry.
The insider trading probe is still underway, raising questions about when, if ever, the truth will be unveiled. Stay tuned for more updates as this intriguing case unfolds.
Enrichment Data (15% integration):
$600 million acquisition of LeoVegas before the deal went public.
Insider Trading: An Overview
Insider trading is an illegal activity involving the trading of a publicly-traded company's stock or other securities based on material, non-public information regarding the company. Insiders, such as corporate executives, directors, and major shareholders, have access to sensitive, privileged information that, when leveraged for financial gain, is considered a violation of securities law. Insider trading can take many forms, including tipping, trading "on the quiet," and buying or selling before releasing significant news. Those found guilty of insider trading face heavy fines and potential imprisonment.
MGM-LeoVegas Merger: A Game Changer
raided LeoVegas’ Stockholm offices on June 7. Later that day, the agency announced it had launched a preliminary investigation into the possible insider trading of LeoVegas’ shares.
MGM's acquisition of LeoVegas marks a significant stride in the expansion of the gaming industry by linking traditional gaming with the online domain. The merger represents a powerful alliance of MGM's collectively strong brand and LeoVegas' digital prowess, which together can lay the groundwork for a potentially dominant stake in the digital gaming sphere.
[1] "MGM is finalizing its $604 million takeover of LeoVegas," Casino.org, May 2, 2022, https://www.casino.org/news/mgm-is-finalizing-its-604-million-takeover-of-leovegas/.
- The news article is available to read in full at the link marked with the 'Read More' href tag, which reads: 'Read More'.
- The Swedish Economic Crime Authority (SEC) initially released a PNG image of the warrant they issued for the arrests, which was shared on Twitter with the caption: '@casinoorgphilc shares a PNG image of the SEC's warrant for the arrests.'
- The panel__author tag contains a link to Philippe Conneller's author page, which can be accessed by clicking on his name: 'Philip Conneller'.