Gamestop Corp. CEO Ryan Cohen has been fined nearly $1 million after being accused of violating antitrust laws when acquiring shares in Wells Fargo & Co.
Cohen didn’t file a form he was required to undergo 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 press release Wednesday.
While he was accumulating these shares, Cohen often sent emails to Wells Fargo’s senior leadership — including the CEO — with suggestions on how one can improve the business and to hunt a seat on the board. This try and “influence Wells Fargo’s business decisions,” in line with the FTC, meant he couldn’t 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 any wrongdoing. The settlement won’t be final until a federal judge approves it.
A representative for Wells Fargo declined to comment. Cohen couldn’t immediately be reached for comment.
Cohen, who can be managing partner of RC Ventures LLC and co-founder of Chewy Inc., began buying Wells Fargo shares in 2016, in line with the grievance filed by the Justice Department on behalf of the FTC within 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 grievance says. Cohen also made suggestions on how Wells Fargo could improve its operations, similar to its technology and mobile app. Cohen continued these communications with the bank’s leadership through no less than April 2020, it says.
In March 2018, Cohen purchased greater than 562,000 shares of Wells Fargo stock, bringing his total holdings above the HSR threshold, which on 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 buy stocks until September 2020. According to the grievance, he filed an HSR correction report in January 2021 for his March 2018 purchases.
