GameStop CEO Ryan Cohen agreed to pay a nearly $1 million civil penalty Wednesday to settle Federal Trade Commission (FTC) allegations that he unlawfully bought Wells Fargo securities.
The agency said that Cohen violated the Hart-Scott-Rodino Act, which requires investors to disclose purchasing large amounts of securities in a press release. Allegedly, Cohen did not disclose that he purchased more than 562,000 voting securities in the bank.
The disclosure would’ve given regulators the opportunity to review the deal for antitrust violations before it went through, the FTC said. Even though Cohen’s purchase of Wells Fargo securities was below the standard 10% threshold, it allegedly violated antitrust laws.
Cohen allegedly intended to influence Well Fargo’s business, the regulator said, advocating for a seat on the company’s board of directors in emails. At the same time, Cohen engaged in “periodic communications” with the bank’s leadership after he purchased the securities, suggesting steps that could be taken to improve the bank’s business, the FTC said.
Wells Fargo declined comment to Decrypt. Cohen will pay $985,320, according to the FTC release.
Cohen joined GameStop’s board of directors in early 2021, and he was appointed chairman of the board six months after stepping into that role. Around a year ago, he was appointed CEO, taking over the reins of the video game retailer from Matt Furlong.
Meanwhile, GameStop’s share price has fallen 3% Wednesday to $19.55, adding on to a more than 13% decrease over the past month. Amid the online return of meme stock influencer Keith Gill, a.k.a. Roaring Kitty or DeepFuckingValue, GameStop’s stock price jumped to $48.75 in May.
Cohen, the founder and former CEO of the pet supplies company Chewy, said that GameStop’s leadership was “not here to make promises or hype things up” during a shareholder meeting in June. While the meeting was widely hyped amid the return of Roaring Kitty, it ultimately proved to be routine.
In the run-up, GameStop fans speculated that Gill could be appointed to the company’s board of directors. Yet the fabled meme stock influencer wasn’t even mentioned on the call.
Gill became the de facto face of a retail-led movement aiming to outsmart Wall Street short sellers in 2021. A meteoric rise in the company’s share price created a cult-like following toward the company, enshrining GameStop in internet culture as a widely popular meme stock.
GameStop’s shares have trended lower from their May peak as enthusiasm has cooled. The last time Gill flashed his positions in GameStop on Reddit was June 13, over three months ago.
A Twitter (aka X) post from Gill suggested that the influencer was interested in Chewy in June, with a subsequent SEC filing showing that he had purchased 9 million shares in the firm.
But that sentiment appeared to change when he posted a meme earlier this month that showed a character from the film “Toy Story 2” dropping a toy with a dog’s face superimposed on top. It was the same cartoonish dog image that Gill originally tweeted back in June.
The meme stock influencer’s online reappearance captivated the public’s interest earlier this year. A livestream that towed the line between performance art and financial advice amassed over 700,000 viewers, who were eager to hear Gill’s thoughts on GameStop.
During the live stream, Gill name-dropped Cohen, describing him as someone who could help the video game retailer modernize its business model away from selling gaming hardware.
“He seems to be taking the right approach, given this unique situation,” Gill said. “Let’s see where it goes from here.”
Edited by Andrew Hayward
Editor's note: This story was updated after publication to note that Wells Fargo declined comment.