SECA Probes LeoVegas for Alleged Insider Trading

June 15, 2022
14,777 Views
Clinton Jacob Machoka

Authorities are investigating Swedish iGaming company LeoVegas for potential insider trading. On Tuesday, the Swedish Economic Crime Authority (SECA) visited Stockholm's operator headquarters.

LeoVegas issued an official response to corroborate rumors that SECA has commenced an inquiry into possible insider trading involving LeoVegas shares.

"The Swedish Economic Crime Authority contacted LeoVegas on June 7 in connection with a preliminary investigation into possible insider trading in the company's shares," the statement read, noting that "LeoVegas is fully cooperating with the authorities in their investigation."

The company further indicated that no employee, management, or board member is currently under inquiry. Neither LeoVegas nor SECA provided any further information about the scope of the initial probe.

Using insider knowledge encompasses buying or selling bonds based on non-public information about that confidentiality, such as the $607 million purchase offer MGM Resorts proposed on May 2, 2022. This bid was equal to SEK 61 per share and represented a premium of 44 percent to Friday's market close price of SEK 42.32.

A thorough examination of the price dynamics indicates that the share price started to rise significantly before, starting on March 7, following a market closing of SEK31.12 on Friday, March 4. Ever since, the price has steadily increased until it reached a peak slightly over SEK40 on April 20 before shooting to SEK59.50 at the open on Monday, May 2.

Swedish media outlet DI got in touch with LeoVegas' chairman, Per Norman, for remarks on allegations that MGM's bid was leaked before the offer became public. This leak enabled others to benefit from the upsurge in the firm's share price when the story of the proposal hit the headlines on Monday. Nevertheless, his response did not do much to refute the insider trading assertion.

"No, that's not our view. Leo Vegas is one of the few semi-large companies with its platform and a fantastic brand. So for a land-based operator, it will be a pretty natural candidate to look at, " Per Norman, Chairman LeoVegas stated.


Small impact

The announcement of the continuing probe had a minimal effect on the early morning trading of LeoVegas shares on the Nasdaq Stockholm, as the iGaming operator's stock traded slightly over the SEK60 threshold with a 0.15 percent loss.

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