GameStop CEO Cohen to pay nearly $1 million for allegedly violating Wells Fargo Securities takeover rules

By Sabela Ojea

GameStop CEO Ryan Cohen has reached a settlement with the Federal Trade Commission alleging antitrust violations related to his failure to timely disclose his acquisition of a reportable amount of Wells Fargo voting securities.

Cohen agreed to pay a $985,320 civil penalty for failing to file a Hart-Scott-Rodino form with federal antitrust agencies before consummating a securities deal, the regulator said Wednesday.

The Hart-Scott-Rodino Act requires purchasers of certain amounts of a company’s stock to publicly notify regulators so federal agencies can investigate the transactions before they close. Cohen purchased 562,077 voting securities in Wells Fargo in March 2018, bringing his total holdings above the applicable Hart-Scott-Rodino notification threshold of $100 million, the FTC said.

The agency said that from March 2018 to September 2020, Cohen continued to purchase Wells Fargo voting securities.

After acquiring the stock, Cohen maintained periodic communications with Wells Fargo management about suggestions for improving the bank’s operations and advocating for a potential board seat, the FTC added. So the acquisitions were not exempt from reporting under the Hart-Scott-Rodino Act because the communications showed that Cohen intended to participate “in formulating, determining, or directing fundamental business decisions” of Wells Fargo, according to the complaint.

On Jan. 14, 2021, Cohen filed an amended motion under the Hart-Scott-Rodino Act in connection with the March 2018 acquisition, the FTC reported. The maximum civil penalty for violating the Hart-Scott-Rodino Act at the time Cohen filed the amended motion was $43,792 per day, the agency added.

Write to Sabela Ojea at [email protected]

(END) Dow Jones Newswires

September 18, 2024, 1:22 PM ET (5:22 PM GMT)