U.S Regulators Investigating Options Trade Gains on Microsoft-Activision Deal

United States Federal prosecutors and securities regulators are probing the large bets which Alexander von Furstenberg, David Geffen and Barry Diller made on trading shares of videogame maker Activision Blizzard Inc. (ATVI) back in January a few days before the company announced it had agreed to be acquired by Microsoft Corp. (MSFT).

According to the report by the regulator, the named three individuals made an unrealized profit of about $60 million on the options trade based on the recent share price of Activision of around $80.

The report further says The Justice Department is investigating whether any of the options trades violated insider-trading laws. In addition, the Securities and Exchange Commission (SEC) is also separately probing a civil insider trading investigation.

According to Diller who is also the chairman of IAC, none of them had any prior knowledge that Microsoft was planning to acquire Activision Blizzard they only invested in the stock since they believed it was undervalued and possessed a huge potential of going up.

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,” said Diller.

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