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 over alleged antitrust violations related to his acquisition of voting stock in Wells Fargo.

On Wednesday, the regulator said Cohen agreed to pay a $985,320 civil penalty after the chief executive failed to timely file a Hart-Scott-Rodino form with federal antitrust agencies to disclose the purchase before the securities deal was consummated.

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.

From March 2018 to September 2020, Cohen continued to purchase Wells Fargo voting securities. After acquiring the shares, Cohen maintained periodic communications with Wells Fargo management about suggestions for improving the bank’s operations and advocating for a potential seat on the board, the agency said.

On Jan. 14, 2021, Cohen filed a corrective motion under the Act relating to the acquisition of voting securities in March 2018. The maximum civil penalty for violating the act at the time Cohen filed the corrective motion was $43,792 per day, the FTC added.

Cohen joined GameStop’s board in January 2021 and was elected chairman in June of that year, and assumed the CEO position in September 2023. He owns a significant stake in the company through venture capital firm RC Ventures, where he is a managing partner. Cohen is known for founding Chewy.com and selling the online pet supplies retailer in one of the largest e-commerce acquisitions in history at the time.

GameStop last week reported adjusted earnings for the second quarter of its fiscal year ended Aug. 3, but shares plunged after sales fell more than 30%, missing Wall Street expectations.

Write to Sabela Ojea at [email protected]

(END) Dow Jones Newswires

September 18, 2024, 5:59 PM ET (9:59 PM GMT)