GameStop (GME) CEO Ryan Cohen has settled with the Federal Trade Commission (FTC) over antitrust violations. The United States regulatory agency accused Ryan of unlawfully acquiring Wells Fargo’s securities. Following the news, GME experienced a 3% price decline in just 24 hours.
The Gamestop Versus FTC Suit and Settlement
In a press release, the FTC announced that Cohen would pay a $985,320 civil penalty to settle all applicable charges. The agency said Cohen violated the Hart-Scott-Rodino Act, which mandated investors to report large securities acquisitions.
According to the complaint, Cohen acquired more than 562,000 Wells Fargo voting securities. Cohen’s purchase prompted a need to file an HSR form with Federal antitrust regulators before finalizing the transaction.
Although Cohen’s acquisition of Wells Fargo securities was below the standard 10% threshold, it allegedly violated antitrust laws. Usually, the agency gives a 30-day window after a transaction has been reported to conduct an initial investigation.
During this time, the agency initiates a “second request” for additional information, making closing a transaction illegal. The FTC said Cohen intended to influence Wells Fargo’s business decisions with the securities purchase.
The agency revealed that Cohen’s emails when he advocated for a board seat evidenced this. Subsequently, Cohen communicated periodically with Wells Fargo leadership, bringing ideas to improve the business.
Cohen joined GameStop’s Board of Directors in early 2021. Six months later, he was appointed Chairman. About a year ago, he was appointed CEO, taking over the video game retailer from Matt Furlong.
GameStop Share Rally and Volatility
GME was hovering at $19.7 at the time of writing after a 3% drop within the last 24 hours. The intraday decline adds to a more than 13% decrease experienced in the past month.
Meanwhile, GameStop’s stock price jumped to $48.75 in May following the online return of meme stock influencer Keith Gill, a.k.a. Roaring Kitty. Roaring Kitty had a major influence on GameStop stock and the analogous GameStop token.
In mid-June, GameStop shares saw a 12.28% decline after Ryan Cohen discussed the video game retailer plans with the investors. Cohen emphasized cost reduction and profitability through a smaller network of stores with a wider selection of higher-value products.
In May and June, nearly $4 billion in shares were sold to fund the upcoming financial strategic update.
Where is Roaring Kitty?
Roaring Kitty was at the top of the drivers of the GME short squeeze of 2021. He disappeared from social media on June 19, 2021. After a three-year hiatus, he publicly appeared on May 13, 2024.
After his first appearance, the stock price spiked to 74.40% in a single day. Roaring Kitty last posted about his GameStop position on Reddit on June 13, roughly three months ago.
Gill began growing his online influencer presence in 2020, encouraging people to invest in GameStop, whose shares he had started buying the previous year. His preferred social media platforms were Reddit discussion boards and YouTube, where he shared films about his thoughts on financial markets and inexpensive stocks.
