Insider trading at Leovegas during the betMGM acquisition is being investigated
Matheus Alves
June 28, 2022
On the morning of June 7, LeoVegas was visited by SECA (a Swedish government agency with a mandate to investigate and prosecute financial crimes) to inform the company of an investigation into possible insider trading. The company that is merging with BetMGM has made itself available to assist with the investigations.
Insider trading is; buying or selling securities based on unpublished information. A thorough investigation is being done to understand about the rise of the shares a few weeks before the offer is made by BetMGM casinos.
The LeoVegas Group issued a press release, saying:
"On June 7, LeoVegas was contacted by the Swedish Economic Crimes Authority due to a preliminary investigation into suspected insider trading in the company's shares. LeoVegas is fully assisting the authorities in their investigation.
No employee, member of the management team or member of the company's board has been notified of any criminal suspicion. The company has no further information to provide. All questions concerning the preliminary investigation should be referred to the Swedish Economic Crimes Authority.”
A spokesman for the MGM company, said that "the statement made by Leovegas and all we will have at the moment.
SECA also confirmed only the beginning of investigations, and declined to provide further details.
Are negotiations between LeoVegas and BetMGM continuing?
BetMGM, the leading US casino based in New Jersey, has made a billionaire bid for Swedish firm LeoVegas . This all happened on the day May 2, 2022 , and the offer corresponds to the value of 3 billion Dollar (NZD).
LeoVegas was ready to accept the offer made by BetMGM, and finalize the purchase in August this year. The CEO and co-founder of LeoVegas, Gustav Hagman , in his last statement for the acquisition, showed to be very excited about the merger between the companies.
It is not yet clear whether after the news of a possible investigation into the LeoVegas Group the merger between the two companies will continue. Based on cases of other companies charged by Swedish authorities, the matter could take months to resolve. However, they cannot legally prevent the takeover from going ahead.
Apparently LeoVegas shares have not been affected by the news. The group's shares fell slightly, by around 0.17%.
And the BetMGM group with a percentage drop of 0.25%.
According to us, this does not affect our rating for LeoVegas for New Zealand players . Mostly because it seems to have been outsiders using the information and negotiating with them. It seems that no one in the administration of Leovegas made suspicious deals, so our rating for Leo is a solid 5 stars.
