Gamestop Corp. CEO Ryan Cohen has been fined nearly $1 million for allegedly violating antitrust law by purchasing shares in Wells Fargo & Co.
Cohen failed to file a form he was required to submit to antitrust authorities under the Hart-Scott-Rodino Act after his purchases of Wells Fargo stock exceeded a certain threshold, the Federal Trade Commission said in a statement Wednesday.
While he was accumulating these shares, Cohen regularly sent emails to Wells Fargo’s senior leadership — including the CEO — with suggestions on how to improve the business and to seek a seat on the board. This attempt to “influence Wells Fargo’s business decisions,” according to the FTC, meant he could not claim an “investment-only” exemption under the HSR.
“When Cohen purchased the Wells Fargo stock, he intended to influence Wells Fargo’s business decisions, as evidenced by Cohen’s emails lobbying for a seat on the board of directors,” the FTC said in its statement.
Cohen agreed to the settlement with the FTC without admitting wrongdoing. The settlement is not final until a federal judge approves it.
A representative for Wells Fargo declined to comment. Cohen could not immediately be reached for comment.
Cohen, who is also managing partner of RC Ventures LLC and co-founder of Tough Inc. began buying Wells Fargo shares in 2016, according to the 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 “inform him of the contributions he could make” if he became a member of the bank’s board, the complaint says. Cohen also made suggestions on how Wells Fargo could improve its operations, such as its technology and mobile app. Cohen continued these communications with the bank’s leadership through at least April 2020, it says.
In March 2018, Cohen purchased more than 562,000 shares of Wells Fargo stock, bringing his total holdings above the HSR threshold, which at the time was $168.8 million on an adjusted basis. He must pay a civil penalty of $985,320 for failing to file the HSR form.
“Cohen’s intent in acquiring Wells Fargo’s voting securities on March 22, 2018, was to ‘participate in the formulation, determination or direction of Wells Fargo’s fundamental business decisions,’ the complaint states.”
Cohen continued to purchase stocks until September 2020. According to the complaint, he filed an HSR correction report in January 2021 for his March 2018 purchases.