An investigation by the federal Securities and Exchange Commission and Justice Department has paused billionaire media mogul Barry Diller’s application to be licensed by Nevada gaming regulators for his ownership stake in MGM Resorts International.
On March 2, the Nevada Gaming Control Board recommended that IAC Chairman Diller and CEO Joey Levin be licensed as part of their company’s 14% ownership stake in MGM Resorts. The following week, The Wall Street Journal reported Diller, fellow media mogul David Geffen, and Diller’s stepson Alex von Furstenberg acquired a large number of shares of Activision Blizzard stock days before the video game maker agreed to be acquired by Microsoft for $68.7 billion. Activision shares soared on the news of the deal.
Diller has denied accusations of insider trading.
On Thursday, Nevada Gaming Commission Chair Jennifer Togliatti announced the postponement of the licensing of Diller, citing the need for additional investigation on suitability, without getting into details.
“Regarding this item, I am referring applications related to Mr. Diller back to the Nevada Gaming Control Board for further fact finding and investigation and continuing all applications … until the April meeting of the Nevada Gaming Commission.”
Diller, who confirmed that he’d been contacted by regulators, gave a statement to CNBC denying any wrongdoing.
“None of us had any knowledge from any person or any source or any anything about a potential acquisition of Activision by Microsoft,” Diller said in the statement. “We acted simply on the belief that Activision was undervalued and therefore had the potential for going private or being acquired,” Diller said.
“And if we’d had any such information, we would never have traded on it. It strains credulity to believe we would have done so three days before Microsoft and Activision made their announcement.”
In a statement to the Journal, Diller said, “It was simply a lucky bet.”
The Journal reported at the time that the three men had an unrealized profit of about $60 million on an options trade. It reported the Justice Department has undertaken a criminal probe to determine whether insider-trading laws were violated. The SEC is doing a civil investigation.
During the summer of 2020, IAC, a publicly traded company, spent more than $1 billion to purchase 59 million shares, reported as a 12% ownership stake in MGM Resorts. The two assumed positions on MGM’s 14-member board of directors.
Diller is the chairman of Expedia, the founder of Fox Broadcasting Company and USA Network, and the former chairman and CEO of Paramount Pictures.
