FTC slaps GameStop CEO with $1M fine over Wells Fargo stock

Cohen failed to file a form he was required to file with antitrust agencies under the Hart-Scott-Rodino Act after his purchases of Wells Fargo stock exceeded a certain threshold, according to a statement Wednesday from the Federal Trade Commission.

As he amassed those shares, Cohen periodically emailed Wells Fargo management — including the chief executive — with suggestions for improving the business and seeking a board seat. That effort to “influence Wells Fargo’s business decisions” meant it could not claim an “investment-only” exemption under the HSR, according to the FTC.

“When he acquired Wells Fargo stock, Cohen intended to influence Wells Fargo’s business decisions, as evidenced by Cohen’s emails when he advocated for a board seat,” the FTC said in its statement.

Cohen agreed to the settlement with the FTC without admitting any wrongdoing. The settlement is not final until a federal judge approves it.

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 stock in 2016, according to the complaint filed by the Justice Department on behalf of the FTC in U.S. District Court. from Colombia.

According to the complaint, Cohen emailed Wells Fargo’s CEO in February 2018 “to advise him of the contributions he could make” if he were to become a member of the bank’s board. Cohen also made suggestions about how Wells Fargo could improve operations, such as technology and its mobile app. Cohen continued such communications with the bank’s management until at least April 2020, the statement said.

In March 2018, Cohen purchased more than 562,000 Wells Fargo shares, bringing his aggregate holdings past the HSR threshold, which at the time was $168.8 million on an adjusted basis. He will pay a civil penalty of $985,320 for failure to file the HSR form.

“Cohen’s intent, when he made the purchases of Wells Fargo voting securities on March 22, 2018, was to participate ‘in formulating, determining or directing the basic business decisions'” of Wells Fargo, according to the complaint .

Cohen continued to buy stock through September 2020. He made a corrective HSR filing in January 2021 for his March 2018 purchases, according to the complaint.