SBC News Voice of the Sports Betting Industry
A manager at LeoVegas has been arrested alongside two accomplices for insider trading activity related to the firm’s takeover by MGM, according to Swedish media.
Daily tabloid Aftonbladet reported that the key suspect was taken into custody between 1 February and 29 April, with MGM’s initial bid for LeoVegas occurring in May.
The individuals in question are suspected of having accumulated LeoVegas stock in the build-up to the takeover, having previous knowledge that MGM was preparing a bid.
The US based casino, betting and entertainment conglomerate made its initial offer of $607/€580m in early May, which was unanimously recommended for shareholder approval by LeoVegas’ board.
According to Aftonbladet, Swedish District Attorney Pontus Hamilton estimates the senior manager – who is the only one of the three with a direct connection to LeoVegas – made ‘millions’ by buying up shares in his employer, whcih went up in value by up to 40% of MGM’s announcement.
“The case is basically about a person at the company having information that is not public and that affects the price when it is made public,” Hamilton said.
“Then you can take the opportunity to take some positions before the publication and then there are other people who have traded in this share.”
The accused has denied all wrong-doing, according to Aftonbladet, and has stated that he hopes all misunderstandings will be resolved during court proceedings.
His co-defendants also deny any criminal activity connected to LeoVegas’ takeover by MGM and the trading of its shares on the Stockholm exchange.
LeoVegas has made it public that it is aware of the investigation, but stressed that the individual under suspicion is not a member of its board or senior management.
Meanwhile, the District Attorney also remarked the authorities ‘have no suspicions against anyone else at the company’, and that prosecutors will ‘see where it leads’ with regards to the investigation.
“It has come to our attention that an employee of the company has been served with suspicion of insider trading,” a statement from LeoVegas’ Director of Communications and Public Affairs, Daniel Valiollahi, read.
“It is about an employee and not a person on the board or management team. As a company, we set high standards for ourselves when it comes to regulatory compliance, and since June we have cooperated with the authorities in their investigation.”
LeoVegas secured the approval of 98% of its board to move ahead with the acquisition in September, whilst a month prior MGM cleared regulatory and governmental barriers.
By acquiring LeoVegas, the company will secure a stronger foothold in Europe, where its new holding is an established and well-recognised igaming brand.
It will also, however, be gaining an asset which has faced some trading difficulties as of late, with Q3 operations seeing a strong performance in its home markets in the Nordics but a 19% revenue decline in Western Europe, leading to an overall decrease in earnings by 1% to €98m (€99.4m).
