Skip to main content

It’s certainly suspicious when a CEO’s self-proclaimed “long time friend” loads up on said CEO’s company’s shares just before those very beaten-down shares get a lucrative offer from a potential buyer. Still, suspicion is not beyond a reasonable doubt, and there are a hell of a lot of dots left to connect before you can say that Barry Diller committed insider trading with a sweet tip from his buddy, Activision Blizzard chief Bobby Kotick. Like, was there a conveniently-timed Coca-Cola board meeting where Kotick passed Diller a high-school girl-style folded note that the 80-year-old then ate and acted upon? Was there a fortuitously-timed phone call that can be pointed to at trial? Why would a billionaire like Diller (and fellow billionaire David Geffen) risk it all for (for him) a mere share of $60 million? Is his stepson so hard up and too proud to take a handout that a trade of this sort was the only way to help him out?

Well, about that stepson….

Activision CEO Bobby Kotick met with Alexander von Furstenberg in the week before Mr. von Furstenberg and media moguls Barry Diller and David Geffen bought options to purchase Activision shares at $40 each on Jan. 14. The options trade, which has generated an unrealized profit of about $59 million, was arranged days before Activision agreed to be acquired for $95 a share by Microsoft Corp…. “Mr. Kotick had a social brunch with his friends at a popular restaurant,” an Activision spokesman said. “He, of course, didn’t share any information with them regarding a possible transaction with Microsoft.”

For his part, Diller is sticking to his “are you fucking mental?” story.

“We had zero knowledge of that transaction and it belies credulity to think that if we did we would have proceeded,” Mr. Diller wrote Thursday in an email to the Journal. “It’s equally unlikely to believe Mr. Kotick, a sophisticated professional, in a social breakfast with Mr. von Furstenberg and his wife would have told them of the pending transaction….”

“It’s a simple situation and a simple coincidence, which took place over 2 business days,” Mr. Diller wrote in the email. “All the information and records we are giving to the investigators will support that. I did not wait until I was 80 to participate in so obvious a fraud.”

U.S. Probes Meeting Between Activision CEO and Option Buyer [WSJ]

For more of the latest in litigation, regulation, deals and financial services trends, sign up for Finance Docket, a partnership between Breaking Media publications Above the Law and Dealbreaker.

Related

barry diller

Billionaire Says He Just Got ‘Lucky’ When Friend Sold His Company To Microsoft

Definitely no exchange of non-public information involved, sayeth Barry Diller.

By United States Department of Justice (http://www.justice.gov/usao/nys/meetattorney.html) [Public domain], via Wikimedia Commons

Prosecutors Have Been Using The Wrong Insider Trading Law All This Time

If Preet Bharara had known about Title 18, he’d probably be president by now or something.

(Cleveland Browns)

NFL Player Accused Of Insider Trading Obviously A Member Of The Browns

Jimmy Haslam knows a kindred spirit when he sees one.

WilburRoss.Rancy

Adorable European Politicians Accuse Wilbur Ross Of Insider Trading, Think It Actually Matters

There’s nothing quite like the naively impotent rage of the European Parliament.

ronlivingston

Office Space: Insider Trading

The downtrodden of a Silicon Valley IT department get their revenge. Briefly.

trump victory

Trump Pardon Parade A Veritable Dealbreaker ‘Where Are They Now?’

Not in prison anymore, thanks to the Dear Leader’s last acts!