The Securities and Exchange Commission and the US Justice Department have opened a probe into potential inside trading by Barry Diller, a millionaire, who now wants to acquire an ownership stake in MGM Resorts International.
Barry Diller’s Nevada Gaming License on Pause
His request, though, has been put on pause by the Nevada Gaming Commission, citing the most recent events about Diller. Diller, who is chairman of IAC, and company CEO Joey Levin, were both recommended to receive a license based on their 14% ownership stake in MGM Resorts.
However, the Wall Street Journal revealed that Diller’s stepson, Alex von Furstenberg, and David Geffen, a fellow billionaire, have acquired a large number of stocks ahead of Activision Blizzard’s acquisition of Microsoft. The deal is worth $68.7 billion and is one of the biggest consolidations of the gaming industry.
The Nevada Gaming Control Board recommendation for a license will now have to be revisited, said NGC chair Jennifer Togliatti. She was brief and argued that Diller would need to be vetted once again to determine whether awarding a license to him would be sustainable.
Togliatti requested that Biller’s license application and subsequent recommendation be once again returned to the NGCB and revised. Diller has composedly denied the claims that he may have been involved in a
“None of us had any knowledge from any person or any source or any anything about a potential acquisition of Activision by Microsoft. We acted simply on the belief that Activision was undervalued and therefore had the potential for going private or being acquired.”
IAC chairman Barry Diller
Diller Makes a Lucky Bet That Turns Out Successful
Diller further objected that the very idea that he – or anyone as closely associated with him – would purchase stock so close to the actual deal date “strained credulity,” and argued that all in all, it was just a “lucky bet.”
This has not stopped the Justice Department to proceed with a criminal probe seeking to establish whether insider trading has occurred. Diller has been composed since the launch of the probe, arguing that he was not concerned about the findings as there was no way anything of the sort would be proven.
In light of this, Diller should sooner or later complete the NGCB’s repeated review of his suitability for a license and receive approval by the commission to hold one. Nevada is particularly sensitive when it comes to licensing individuals, following the big fallout the regulator had with Steve Wynn.