FTC Fined GameStop CEO $1 Million Over Wells Fargo Stock
Gamestop Corp. CEO Ryan Cohen will pay a nearly $1 million fine over allegations he violated antitrust laws when he bought back his company’s stock. Wells Fargo & Company
According to a statement Wednesday from the Federal Trade Commission, Cohen failed to file a form he was required to file with antitrust authorities under the Hart-Scott-Rodino Act after his purchase of Wells Fargo shares exceeded a certain threshold.
As he accumulated those shares, Cohen periodically emailed Wells Fargo management—including the CEO—with suggestions for improving the business and sought a seat on the board. His efforts to “influence Wells Fargo’s business decisions” meant he could not claim an “investment-only” exemption under the HSR, according to the FTC.
“In acquiring Wells Fargo stock, Cohen intended to influence Wells Fargo’s business decisions, as evidenced by emails Cohen sent as he campaigned for a board seat,” the FTC said in its statement.
Cohen agreed to settle with the FTC without admitting any wrongdoing. The settlement is not final until a federal judge approves it.
A Wells Fargo representative declined to comment. Cohen could not immediately be reached for comment.
Cohen, who is also managing partner of RC Ventures LLC and co-founder tough Inc., began buying Wells Fargo stock in 2016, according to a complaint filed by the Justice Department on behalf of the FTC in the U.S. District Court for the District of Columbia.
Cohen emailed Wells Fargo’s CEO in February 2018 “to advise him of the contributions he could make” if he became a member of the bank’s board, according to the complaint. Cohen also made suggestions on how Wells Fargo could improve operations such as its technology and mobile apps. Cohen continued such conversations with the bank’s leadership until at least April 2020, the complaint said.
In March 2018, Cohen purchased more than 562,000 shares of Wells Fargo, bringing his total holdings above the HSR threshold, which was then $168.8 million on an adjusted basis. He will pay a civil penalty of $985,320 for failing to file an HSR form.
According to the complaint, “Cohen’s purpose in executing the March 22, 2018, acquisition of Wells Fargo voting securities was to participate ‘in formulating, determining, or directing the fundamental business decisions’ of Wells Fargo.
Cohen continued to buy shares until September 2020. According to the complaint, he filed an amended HSR in January 2021 for the March 2018 purchases.
