Entertainment titan Barry Diller is denying any suggestion that he, his stepson, and music mogul David Geffen were involved in insider trading in their purchases of Activision Blizzard call options, The Wall Street Journal is reporting.
The newspaper reported that the Justice Department and securities regulators are investigating whether any of the options trades — made by Diller, Alex von Furstenberg, and Geffen shortly before the videogame maker agreed to be acquired by Microsoft — violated insider-trading laws.
Diller, who confirmed to the Journal that he had been contacted by regulators, said, "It was simply a lucky bet. We acted on no information of any kind from anyone. It is one of those coincidences."
In a statement to CNBC, he said, "None of us had any knowledge from any person or any source or anything about a potential acquisition of Activision by Microsoft."
"We acted simply on the belief that Activision was undervalued and therefore had the potential for going private or being acquired," Diller said.
"And, if we had any such information we would never have traded on it — it strains credulity to believe we would have done so three days before Microsoft and Activision made their announcement."
According to the Journal, the three men bought options to buy Activision shares at $40 each on Jan. 14. The shares were trading around $63 at the time of their transaction. The newspaper noted the options were already profitable to exercise.
Now, based on recent Activision share prices of about $80, the three men have an unrealized profit of about $60 million, the newspaper noted.
Diller told the Journal that von Furstenberg had been "buying Activision stock prior to that and the thought was that Activision at some point would either go private, or would be acquired."
Von Furstenberg could not be reached by the Journal for comment. Geffen did not immediately respond to the paper's request for comment. Representatives for the Justice Department and Securities and Exchange Commission declined to comment.
Jeffrey Rodack ✉
Jeffrey Rodack, who has nearly a half century in news as a senior editor and city editor for national and local publications, has covered politics for Newsmax for nearly seven years.
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