The dispute around MGM Resorts International’s acquisition of Swedish online gaming company LeoVegas is still ongoing.
Three individuals, including a senior manager at LeoVegas, were arrested in Stockholm on Monday, on suspicion of insider trading, according to Aftonbladet.
The Swedish newspaper reported the manager is suspected of leaking valuable information about MGM’s $600 million acquisition of the firm before the deal went public on May 2.
The other two suspects are allegedly not connected to LeoVegas but helped execute confidential financial transactions.
MGM LeoVegas’ never-ending story
Daniel Valiollahi, director of communications and public affairs at LeoVegas confirmed that a company employee had been arrested.
But, as Valiollahi emphasized, the case was about “an employee and not a person on the board or management team.”
“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,” he said.
The insider trading that the suspects are allegedly linked to took place between Feb. 1 and Apr. 29. According to Swedish District Attorney Pontus Hamilton, it is suspected to have generated millions in profits.
As Hamilton told Aftonbladet:
“It is an ongoing investigation and we will see where it leads. We have no suspicions against anyone else at the company.”
Insider trading allegations
In May, MGM Resorts revealed plans to acquire 100% of LeoVegas stock shares in a $607M deal. At the time, that price represented a 44% premium on the total value of the company’s stock.
After the deal was released, LeoVegas stock rose by 40% so those who bought company shares before that moment made a substantial profit.
On June 7, the Swedish Economic Crime Authority made an announced visit to the company’s Stockholm-based head office. Swedish authorities were looking for evidence of whether anyone leaked intelligence about MGM’s bid prior to the public announcement. Soon after, a full investigation got underway with LeoVegas’ full cooperation.
No arrests were made at the time. Once the investigation started, LeoVegas publicly stated that nobody was charged with a crime concerning the raid. Back then, LeoVegas emphasized:
“No employee, member in the management team or board member in the company has been notified about any criminal suspicion.”
Months later, that hasn’t changed as far as board members and management personnel go.
Completion of MGM’s offer for LeoVegas
As MGM got one step closer to acquiring a European gambling company and extended its offer, things became more serious. That same tender became a matter of regulator inquiry.
However, the sale received regulatory clearance after MGM Resorts declared LeoVegas acquisition public tender acceptance at the beginning of September.
The gambling giant’s acquisition of LeoVegas has been accepted as 96% of shareholders voted to accept MGM’s offer to obtain all shares of LeoVegas.