FTC slaps GameStop CEO with $1 million fine over Wells Fargo shares

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

As he amassed those shares, Cohen periodically emailed Wells Fargo’s leadership — including its chief executive officer — with suggestions to improve its business and to seek a board seat. That effort to “influence Wells Fargo’s business decisions” meant he couldn’t claim an “investment-only” exemption under the HSR, according to the FTC.

“When acquiring the Wells Fargo shares 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 wrong doing. The settlement isn’t final until a federal judge approves it.

A representative for Wells Fargo declined to comment. Cohen couldn’t 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 Department of Justice on the FTC’s behalf in US District Court for the District of Columbia.

Cohen emailed Wells Fargo’s CEO in February 2018 “to advise him of the contributions he could make” should he become a member of the bank’s board, according to the complaint. Cohen also made suggestions on how Wells Fargo could improve operations like its technology and 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 of Wells Fargo shares, resulting in his aggregate holdings surpassing the HSR’s threshold, which at that time was $168.8 million on an adjusted basis. He will pay a $985,320 civil penalty for failing to file the HSR form.

“Cohen’s intent when he made the March 22, 2018, acquisitions of Wells Fargo voting securities was to participate ‘in the formulation, determination, or direction of the basic business decisions”’ of Wells Fargo, according to the complaint. 

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