GameStop Chief Executive Ryan Cohen has settled an alleged antitrust-law violation with the Federal Trade Commission in connection with the acquisition of a chunk of Wells Fargo voting securities.
The regulator on Wednesday said Cohen agreed to pay a $985,320 civil penalty after the executive failed to file in a timely manner a Hart-Scott-Rodino form with federal antitrust agencies to disclose the purchase before completing his acquisition of the securities.
The Hart-Scott-Rodino Act requires buyers of certain amounts of company's stock to publicly alert regulators so that the federal agencies can investigate the deals before they close. Cohen acquired 562,077 voting securities in Wells Fargo in March 2018, which resulted in aggregated holdings that exceeded the applicable Hart-Scott-Rodino filing threshold of $100 million, the FTC said.
From March 2018 to September 2020, Cohen continued to acquire Wells Fargo voting securities. After acquiring the shares, Cohen maintained periodic communications with Wells Fargo's leadership regarding suggestions to improve the bank's business and to advocate for a potential board seat, the agency said.
On Jan. 14, 2021, Cohen made a corrective filing under the act for the March 2018 voting securities acquisition. The maximum civil penalty for violating the act at the time Cohen made the corrective filing was $43,792 a day, the FTC added.
Cohen joined the board of GameStop in January 2021, and was elected chairman in June of that year and took over as CEO in September 2023. He holds a significant stake in the company through the venture capital firm RC Ventures, where he is a managing partner. Cohen is known for founding Chewy.com and selling the online pet goods retailer in what was at the time one of the largest e-commerce acquisitions in history.
GameStop last week reported adjusted earnings for its fiscal second quarter ended Aug. 3, but the stock took a dive after sales dropped more than 30%, ahead of Wall Street expectations.