The Wall Street Journal: Feds probe meeting between Activision CEO and options buyer ahead of big bet

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Authorities investigating timely trading in Activision Blizzard Inc. securities are looking into at least one meeting between the videogame firm’s chief executive and one of three traders days before they placed a large bet on Activision shares, according to people familiar with the matter.

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CEO Bobby Kotick met with Alexander von Furstenberg in the week before 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.
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The Wall Street Journal has reported.

The Justice Department is investigating whether the options trade violated insider-trading laws, the people familiar with the matter said. The Securities and Exchange Commission is separately conducting a civil insider-trading investigation, the people said.

Diller previously told the Journal in an interview that none of the men had material nonpublic information about the Microsoft-Activision deal. He confirmed they had been contacted by regulators.

“We had zero knowledge of that transaction and it belies credulity to think that if we did we would have proceeded,” 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.”

Kotick’s status in the investigation couldn’t be learned. He hasn’t been interviewed by law-enforcement authorities, some of the people said. The Justice Department declined to comment. The SEC declined to comment.

An expanded version of this report appears on WSJ.com.

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