MGM Faces Scandal After Acquisition of LeoVegas
The suspects are thought to have accumulated LeoVegas stock before the takeover because they knew MGM was putting together an offer. Early in May, the US-based online casino, betting, and entertainment behemoth submitted its initial offer of $607/€580 million, which the LeoVegas board unanimously recommended to the shareholders for approval.
The senior manager, the only one out of three with a solid correlation to LeoVegas, reportedly made “millions” by purchasing shares in his employer, which increased in value by as much as 40% following MGM’s announcement, according to Swedish District Attorney Pontus Hamilton.
In essence, the issue involves a firm employee who possesses knowledge that is not generally known and which, when made public, affects the price, according to Hamilton. Then, since other individuals have already traded in this share, you can take some positions before publishing.
According to Aftonbladet, the defendant denied all wrongdoing and hoped the court processes would clear up any ambiguities. His co-defendants likewise reject any allegations of criminal behavior associated with MGM’s acquisition of LeoVegas and its stock trading on the Stockholm exchange. The investigation was public by LeoVegas, which has made it clear that the suspect is not a member of its board of directors or senior management.
What are the details?
The District Attorney added that no one else in the company was under suspicion by the authorities and that they would follow the probe “where it leads.”
Public Affairs and Director of Communications of LeoVegas, Daniel Valiollah, said, “It has come to the notice that a staff of the company has been issued with allegations of insider trading.”
“It is not about a board member or management team; it is about an employee. Since June, we have aided the authorities in their investigation because, as a firm, we have high expectations for ourselves regarding regulatory requirements.
Ninety-eight per cent of LeoVegas’ board approved the transaction in September, a month after MGM passed regulatory and governmental hurdles. LeoVegas’ acquisition will give the business an excellent footing in Europe, where its new holding is a reputable and well-known online gambling brand. With a solid performance in its home regions in the Nordics but a 19% sales fall in Western Europe, Q3 operations saw a decline in profitability overall of 1% to €98m (€99.4m). It will also gain an asset that has recently seen some trading difficulties.