On Wednesday, the Federal Trade Commission said Ryan CohenManaging Partner of RC Ventures and President and CEO of GameStop Corporation (NYSE:GME), will pay a civil penalty of $985,320.
This good It stems from charges that Cohen violated the Hart-Scott-Rodino Act by failing to file required paperwork during his stock acquisition in Wells Fargo & Company (NYSE:WFC).
Cohen’s actions resulted in an acquisition that exceeded HSR filing thresholds, triggering the need for federal antitrust agencies to review the deal.
Read also: GameStop analyst says retailer could close all stores and operate as a bank to manage losses.
According to the FTC complaint, Cohen’s purchase of more than 562,000 Wells Fargo voting securities required him to file an HSR form and wait for regulatory clearance before completing the transaction.
The HSR Act requires businesses and individuals to report large transactions to the FTC and the Department of Justice to allow for federal review.
According to the complaint, Cohen acquired 562,077 voting securities in Wells Fargo as of March 2018, resulting in its aggregate holdings of Wells Fargo securities exceeding the $100 million threshold, which as of March 2018 was $168.8 million.
Cohen’s acquisition was not exempt under the HSR Act’s Investment Only Exemption.
His emails and interactions with Wells Fargo executives, in which he advocated for a board seat and suggested business improvements, indicated an intent to influence the company’s operations. This intent disqualified his investments from being considered passive investments.
In January 2021, Cohen filed a corrective filing under the HSR Act for the March 2018 acquisition of voting securities.
Under the law, it is prohibited to close a deal during the 30-day investigation period without approval. At the time of Cohen’s violation, the maximum civil penalty for such violations was $43,792 per day.
The FTC’s decision to settle the case and send it to the Justice Department for filing was unanimous, by a vote of 5 to 0.
Last week, GameStop reported second-quarter net sales of $798.0 million, down from $1.16 billion a year ago and missing the consensus of $895.7 million.
The video game retailer reported profit of 1 cent per share, beating the Wall Street consensus estimate of a loss. of 9 cents per share.
Price Action: GME shares rose 1.50% to $19.94 during the pre-market session as of last check Thursday.
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Photo: Courtesy of Bill Jerome on Flickr
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This article GameStop CEO Ryan Cohen fined nearly $1 million for Wells Fargo stock purchase Originally appeared in Benzinga.com
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