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GameStop Corp (NYSE:GEM) CEO Ryan Cohen has agreed to a nearly $1 million civil penalty to resolve a claim from the US Federal Trade Commission (FTC) concerning his failure to report the acquisition of more than $100 million in Wells Fargo shares.
Under the Hart-Scott-Rodino Antitrust Act (HSR), both companies and individuals are required to disclose significant transactions, including large securities acquisitions, to the FTC and the Department of Justice. This reporting allows federal agencies to review and investigate such deals prior to their finalization.
The FTC's complaint alleges that in 2018, Cohen acquired over 562,000 Wells Fargo voting securities, triggering the requirement to file an HSR form with federal antitrust authorities. Cohen did not file this form, thereby violating the HSR Act. Despite his acquisition being less than 10% of Wells Fargo’s outstanding voting securities, it was not exempt under the Investment-Only Exemption of the HSR Act.
The FTC noted that Cohen's intent in acquiring the shares was to influence Wells Fargo's business decisions, as evidenced by his communications. The complaint highlights that Cohen, in his emails, advocated for a board seat and engaged in ongoing discussions with Wells Fargo’s leadership about ways to improve the company’s business operations.
To settle the charges, Cohen will pay $985,320. This settlement addresses the alleged breach of the reporting requirements and reflects the seriousness of compliance with federal antitrust regulations.
