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U.S. insider trading probe investigates Bobby Kotick meeting with ATVI options trader

The investigation focuses on the timing of trades made around the announcement of the Microsoft acquisition.

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Another day, another story that paints Activision CEO Bobby Kotick in an unflattering light. Reports emerged today that the U.S. Justice Department is looking closely into a meeting between Kotick and potential investors just prior to the company’s acquisition by Microsoft.

News of the investigation was first published by the Wall Street Journal on Thursday. The report alleges that the Justice Department is probing a meeting between Bobby Kotick and Alexander von Furstenberg in the week leading up to the surprise Microsoft deal. Furstenberg, along with two other investors, reportedly purchased Activision stock options following the meeting. It is estimated that the transaction generated more than $59 million in unrealized profits.

The Justice Department is attempting to determine whether the options trade violated insider-trading laws, according to those familiar with the matter. The Securities and Exchange Commission (SEC) is also separately conducting a civil insider-trading investigation, according to the report.

One of the parties involved in the options trade, media mogul Barry Diller, spoke to the Wall Street Journal previously and claimed that the options traders had no inside information discussed in the meeting with Kotick. “We had zero knowledge of that transaction and it belies credulity to think that if we did we would have proceeded,” Mr. Diller said Thursday in an email to the Wall Street Journal. “It’s equally unlikely to believe Mr. Kotick, a sophisticated professional, in a social breakfast with Mr. von Furstenberg and his wife would have told them of the pending transaction.”

At the time of writing, it is believed that Kotick has not yet spoken with authorities on the matter. The Journal reported that neither Activision, The Justice Department, nor the SEC was willing to provide an official comment on the report.

Contributing Tech Editor

Chris Jarrard likes playing games, crankin' tunes, and looking for fights on obscure online message boards. He understands that breakfast food is the only true food. Don't @ him.

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