- GameStop CEO Ryan Cohen agreed to pay nearly $1 million for failing to report a $100 million Wells Fargo share acquisition in 2018.
- Cohen sought influence in the bank’s management and only reported the transactions to the FTC in 2021.
OUR TAKE
It highlights regulatory oversight and enforcement by the FTC, showing the consequences of failing to comply with reporting requirements for large financial transactions.
–Jennifer Yu, BTW reporter
What happened
GameStop CEO Ryan Cohen has agreed to pay nearly $1 million to settle a claim by the U.S. Federal Trade Commission (FTC), which accused him of failing to report his acquisition of over $100 million worth of Wells Fargo & Co voting shares. The FTC stated on Wednesday that Cohen did not notify the agency, as required, when he amassed shares exceeding the $100 million threshold in 2018.
Cohen was not acting solely as an investor but had offered input to the bank’s management and sought a seat on the board, according to the FTC. He eventually reported the transactions in 2021. Cohen’s attorney has not yet responded to requests for comment.
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Why it’s important
Ryan Cohen’s $1 million fine shows the FTC’s commitment to enforcing rules on large share acquisitions.Failing to report large transactions, as Cohen did, can result in hefty penalties, reinforcing the FTC’s role in maintaining transparency in financial markets.
Besides, Cohen’s actions, including seeking a board seat and influencing management, highlight how large investors can impact the governance of major companies like Wells Fargo. It reflects the power dynamics between investors and corporations, showing that investment is often more than just financial—it can lead to efforts to direct a company’s strategy and operations.
Furthermore, as CEO of GameStop, Cohen is a high-profile figure, making his case a public example of how influential business leaders can face legal challenges. This may serve as a warning to other executives and investors about the importance of transparency and following regulatory protocols.
