Three men were arrested after being suspected of using inside knowledge of the MGM LeoVegas takeover and profiting 40% from share sales. (Photo by Expect Best on pexels.com)
Earlier this week, LeoVegas announced that it had been fully cooperating with an investigation into possible insider trading.
The investigation is related to the company’s acquisition by MGM Resorts International, which was announced in early May. Allegedly, a LeoVegas employee in a senior position knew of a possible MGM LeoVegas takeover bid prior to a public announcement and shared this information with third parties, as well as purchased shares for himself.
At the time, MGM was exploring the possibility of acquiring LeoVegas in a deal worth about $607 million. In the week following the announcement to the public, LeoVegas’ stock price increased by 40%. All three then sold the shares now under investigation and reportedly made millions of dollars in profits.
In September, the MGM LeoVegas takeover deal was finalised. Following an investigation into shareholders that profited from the deal, the three suspects caught the attention of financial watchdogs in Sweden who believe there was foul play leading to three arrests, all related to insider trading.
How does this affect LeoVegas Casino? The allegations are not against LeoVegas but against a single employee and those said to have used information passed on to purchase shares. LeoVegas is not involved and remains one of the most reputable online casinos in iGaming.
Insider Trading Involved a LeoVegas Senior Manager & Associates
Charges that could possibly be brought against the senior manager involve insider trading and sharing information with third parties. According to reports on the grapevine, the suspect has denied any wrongdoing. The other two people involved are not directly connected to the company but were also arrested for trading LeoVegas stock after being tipped off to a possible deal in the pipeline. Both are said to be associates of the top manager, and they allegedly helped execute beneficial financial transactions.
The onus is on proof: Right now, the authorities will need to prove that the senior manager had knowledge of the LeoVegas MGM takeover. Furthermore, they will need confessions from the two individuals who allegedly acted off the back of inside information provided by the LeoVegas employee.
The Damning Arrests
A raid was conducted by the Swedish Economic Crime Authority, which launched the investigation earlier this month. The raid took place at LeoVegas’ headquarters in Stockholm. The arrests are said to be related to insider trading and a leak of secret information about the MGM takeover.
One the arrested was a top level manager, but it is unclear whether that person still works for LeoVegas since the MGM takeover.
The Juicy Details
Suspects allegedly engaged in inside trading between February and April. They accumulated LeoVegas shares in the months before the MGM takeover. They then sold for an amount believed to be a 40% increase, which occurred on the day of the deal being made public knowledge.
According to the Swedish Economic Crime Authority, the suspects acted in violation of financial laws.
The Official Statement
Earlier this week, the SECA issued a statement saying that the investigation is related to MGM Resorts International’s acquisition of LeoVegas in which the US company MGM paid SEK 61. 00 in cash per share.
The operator of LeoVegas AB, Daniel Valiollahi, stated that the company is “fully cooperating” with the Swedish Economic Crime Authority.
LeoVegas casino has licenses to operate in multiplier jurisdictions including the UK casino market under the UKGC and the MGA, which covers players from South Africa, Canada, India, New Zealand, Ireland and more. Despite the raid, the company said there are no other suspicions against employees. The investigation is still ongoing.
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