A top manager of LeoVegas has been arrested for his alleged involvement with insider trading surrounding the gaming operator’s earlier acquisition by MGM. According to reports out of Sweden the senior employee was one of three people arrested.
Swedish news outlet Aflonbladet reported that the other two people that were arrested on suspicion of insider trading had no direct connections to LeoVegas.
As reported by iGaming Business in June, an investigation into possible insider trading was launched by the Swedish Economic Crime Authority and the operator was cooperating and assisting authorities with the investigation at that time.
According to the report on Aflonbladet, after police raid on LeoVegas’s Stockholm offices, the operators stated: “No employee, person in the management team or board member of Leovegas has been served with any suspicions of crime.”
Arrests Come After Months of Silence
Nothing was heard or released to the media in the meantime until now, when the arrests have come to pass.
According toiGaming Business, who is talking to sources familiar with the situation, the Swedish news outlet’s reporting of events is accurate but nobody in executive management at the firm nor on the board was involved in the allegations.
“It has come to our attention that an employee within the company has been notified about criminal suspicion regarding the disclosure of insider information,” a company spokesman said.
“LeoVegas Group takes ethical conduct and regulatory requirements very seriously, and we are committed to upholding the highest standards of integrity and fairness.
“We have, and will continue to assist authorities with their ongoing investigation.”
Stock Rose 30% in Month Prior to Acquisition Announcement
While LeoVegas stock had already risen 30% before the acquisition by MGM was announced, the buyout offer was for considerably more than the trading price on April 29, the last day of trading before the announcement. MGM offered to buy all shares at a 44% premium of the price at close of trade the day before.
A majority of shareholders in LeoVegas accepted the offer and the deal closed in September, giving MGM a well known and highly respected international online operator to become its vehicle for global growth online. MGM Resorts is the fifth largest gambling company in the world with a market cap over $14 billion.
“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 Hamilton.
Insider trading is a crime that can occur when a trusted person takes inside information about upcoming events that could affect a company’s stock value and exploits that knowledge by buying stock, selling the information, or empowering other persons to profit off knowledge that is not available to the public at large.
Some observers and analysts have pondered aloud whether the earlier rise in LeoVegas stock value could have been the result of leaked insider knowledge.
The manager and the other two arrested maintain their innocence. No names were available nor any details about the outsiders who were arrested.
Source: LeoVegas manager arrested for insider trading, iGaming Business, November 11, 2022