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LeoVegas Casino Manager Arrested for Insider Trading
A senior manager of LeoVegas Casino has been arrested for insider trading related to the online operator’s acquisition by MGM Resorts. Two others are in custody. In early June, the Swedish authority Ekobrottsmyndigheten launched a preliminary investigation into alleged insider trading at LeoVegas.
It was revealed earlier this week that three individuals have been arrested for insider trading, including a LeoVegas executive. The other two persons had no direct connection with the online casino that offers its services internationally.
On June 7, LeoVegas was questioned by the Swedish gamling authority Ekobrottsmyndigheten for a preliminary investigation into possible insider trading in the company’s stock. LeoVegas said in a statement on its website that the gambling operator fully cooperated with the preliminary investigation of Ekobrottsmyndigheten.
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Secret Inside Information
At the end of last week, the Swedish newspaper Aftonbladet reported that a LeoVegas manager was arrested along with two other people. He would have leaked secret information about the million-dollar offer. With this knowledge they would have made millions of euros in profit, according to prosecutor Pontus Hamilton.
The prosecutor said the following about the case:
The case is about a person at the company who has inside and financially sensitive information. It is believed he has taken the opportunity to take some positions before the actual publication of the figures. The two other suspects are accused of having traded the stocks with data they couldn’t have been aware of themselves.
Insider trading at LeoVegas made millions
Ekobrottsmyndigheten’s preliminary investigation into insider trading was related to the announcement that US gambling conglomerate MGM Resorts International plans to acquire LeoVegas. MGM at first made an offer of 61 Swedish Krona (NZ$ 9,91) per share. This amounted to a total offer of NZ$ 974 for all shares of the company.
On Friday, April 29 2022, LeoVegas’ stock closed at 41 Swedish krona per share. Yet, MGM’s offer was 44% higher and when the offer was announced on Monday, April 2, the share went up to 60 Swedish krona (NZ$ 9,91). This allowed the suspects of insider trading to get a significant financial advantage.
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LeoVegas director of communications and public affairs, Daniel Valiollahi, confirmed the arrest to Aftonbladet. He added that the manager was not part of the executive management team or board of directors:
It has come to our attention that an employee within the company has come under criminal suspicion in connection with the disclosure of inside information. The employee is not a member of the executive management or board of directors. LeoVegas Group takes ethical conduct and legal requirements very seriously and we are committed to maintaining the highest standards of integrity. We have and will continue to assist the authorities in their ongoing investigation.
Daniel Valiollahi, LeoVegas
The LeoVegas manager is defended by lawyer Conny Cedermark. Cedermark said that his client denies the accusations and hopes that the misunderstanding will be cleared up soon.
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MGG: “Unique Opportunity for a Global Gaming Company”
In explaining the reason for the take over, MGM said the acquisition of LeoVegas, Stockholm-listed Nasdaq, will provide a “unique opportunity” for the group to create a global online gaming company. It said the deal will provide strategic opportunities to accelerate growth and product offerings and provide a commitment to continued growth. The acquisition of LeoVegas is limited to the European activities of the brand. Activities performed in other markets will continue to operate separately.
The completion of this transaction is an important milestone for MGM Resorts as we continue to pursue our strategy to grow our online gaming footprint globally in this way. We look forward to welcoming the LeoVegas team and are excited to partner with them to grow our global digital gaming business and maximise the full potential of our omnichannel strategy.
Bill Hornbuckle, CEO and President of MGM Resorts
LeoVegas AB is a Swedish operator and provider of online casino products and sports betting. LeoVegas offerings include table games, online pokies, progressive jackpots, and video poker. LeoVegas is headquartered in Stockholm, Sweden, whereas the brand “LeoVegas” is owned by LeoVegas Gaming Limited, based in Malta. Technical development is conducted by a subsidiary of the group, Gears of Leo, found in Sweden. The company also has offices in countries like Italy, Poland, and the UK.