A “top manager” at online gaming giant LeoVegas has been arrested for insider trading in connection with the operator’s $600 million acquisition by MGM Resorts, according to Swedish newspaper Aftonbladet. In addition to the senior employee, two other people have also been arrested, although the manager was the only one with a direct connection to LeoVegas.
The arrests follow a report in June that the Swedish Economic Crime Authority (SEC) was launching an investigation into potential insider trading of LeoVegas’ shares in connection with the acquisition by US gaming giant MGM. At the time, the iGaming operator said it was assisting authorities in the investigation.
The manager is suspected of leaking privileged information about MGM Resorts International’s purchase. All three suspects were arrested on November 10. LeoVegas’ press manager, Daniel Valiollahi, confirmed that a company employee had been arrested, but emphasized that it was not a “person on the board or management team.”
MGM had agreed to pay SEK61 ($6.16) per share to acquire all of LeoVegas’ shares, which the iGaming group noted was a premium of 44% compared to its closing share price on April 29. As a consequence of the offer, LeoVegas’ share price hiked to SEK60.30 on May 2, but it had already risen by more than 30% in the preceding month.
According to Aftonbladet, stock purchases that took place ahead of the acquisition announcement provided “warning signs,” which prompted the SEC to raid LeoVegas’ headquarters in Stockholm on June 7. A search was carried out, but no arrests were made at the time. Since then, the investigation continued quietly, until it now reached a breakthrough.
“It has come to our attention that an employee of the company has been served with suspicion of insider trading,” Valiollahi pointed out. “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.”
“It is an ongoing investigation and we will see where it leads. We have no suspicions against anyone else at the company,” said District Attorney Pontus Hamilton. The manager and his two teammates deny wrongdoing. The three accused are suspected of having made trades “worth millions,” Hamilton told the cited source.
The reports of suspected insider trading didn’t deter MGM from closing the acquisition, which was finalized in September after a majority of shareholders accepted the bid. Bill Hornbuckle, CEO and president of MGM, called the deal “a major milestone for MGM Resorts,” highlighting it would allow the gambling giant to offer online gambling across Europe and elsewhere.