Gamestop Corp. CEO Ryan Cohen is set to pay a nearly $1 million fine for allegedly violating antitrust law by acquiring shares in Wells Fargo & Co.
Cohen failed to file a form he was required to submit to antitrust agencies under the Hart-Scott-Rodino Act after his purchases of Wells Fargo stock exceeded a certain threshold, according to a statement from the Federal Trade Commission on Wednesday.
While he was accumulating those shares, Cohen was periodically emailing Wells Fargo’s leadership — including its CEO — with suggestions for improving its business and seeking a seat on the board. According to the FTC, this effort “to influence Wells Fargo’s business decisions” meant he could not claim the “investment-only” exemption under the health insurance law.
“In purchasing Wells Fargo shares, Cohen intended to influence Wells Fargo’s business decisions, as evidenced by Cohen’s emails when he advocated 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 will not become final until it is approved by a federal judge.
A Wells Fargo representative declined to comment. Cohen could not immediately be reached for comment.
Cohen, who is also the managing partner of RC Ventures LLC and co-founder of Chewy Inc., began buying Wells Fargo shares in 2016, according to the complaint filed by the Justice Department on behalf of the Federal Trade Commission in the U.S. District Court for the District of Columbia.
According to the complaint, Cohen emailed Wells Fargo’s CEO in February 2018 “advising him of the contributions he could make” if he became a member of the bank’s board. Cohen also offered suggestions on how to improve Wells Fargo’s operations, such as technology and a mobile app. Cohen continued such communications with the bank’s leadership until at least April 2020, it said.
In March 2018, Cohen acquired more than 562,000 shares of Wells Fargo stock, taking his total holdings to well over the HSR cap, which at the time was $168.8 million on an adjusted basis. He will pay a civil penalty of $985,320 for failing to file an HSR.
“Cohen’s goal when he made the acquisitions of Wells Fargo’s voting securities on March 22, 2018, was to participate in ‘formulating, determining, or directing the fundamental business decisions’ of Wells Fargo,” according to the complaint.
Cohen continued to buy shares through September 2020. He filed a corrective filing with HSR in January 2021 for his March 2018 purchases, according to the complaint.