The CEO of Stockholm-listed gaming operator Cherry AB, Anders Holmgren, continues to be researched by Sweden’s Economic Crime Authority (ECA) on insider trading suspicion, the company itself confirmed at a Tuesday statement.
The ECA searched Cherry’s head office on Tuesday in regard to its investigation. The gaming company also confirmed that Mr. Holmgren has been arrested. Gunnar Lind, Chairman of Cherry’s Audit Committee, was appointed Interim CEO while the investigation continues.
According to reports by local media outlets, the investigation has been launched following Mr. Holmgren bought late in March SEK12 million worth of stocks in the company. He’s probed for insider trading and gross American misconduct and if the suspicions prove true, he is sentenced to between six months and six years in prison, based on the reach of his alleged violations.
Mr. Holmgren was appointed as Acting Chief Executive and President of Cherry at January 2017 following the unexpected death of the company’s afterward CEO Fredrik Burvall who mentioned “family reasons” because of his decision to resign. Mr. Holmgren was encouraged to assume full leadership duties as CEO of the gaming company last February. It’s very important to note that Cherry’s top executive has been among the creators of Betsson, yet another significant gaming company hailing from Sweden. Mr. Holmgren acted as CEO of that company in the period between 2000-2011.
Gain Warning
After what was be a burdensome integration of this ComeOn business, Cherry announced in its trading statement for its next quarter of 2017 it was decreasing its full-year revenue projections from SEK2.5 billion to SEK2.2 billion and its earnings projections from SEK480 million to SEK400 million.
Back in April 2018, Cherry issued a inverse profit warning, telling investors and analysts that it’s really defeated expectations for its year ended December 31, 2017. As stated previously, Mr. Holmgren bought stock in Cherry in late March worth around SEK12 million. It’s thought that the ECA investigation has been the result of that purchase and the reverse profit warning that was issued soon after.
Cherry said Tuesday that it would cooperate fully during the investigation and would discharge any relevant info in due course. The ECA confirmed the investigation and said that it was related to insider trading and gross American violations, but refused to give additional details in this point as any such movement could affect the continuing probe.
While Cherry’s statement did affirm that the investigation was related to Mr. Holmgren purchasing shares in the organization, it didn’t specify whether the buy in the end of March was the one to have attracted the executive to the ECA’s focus.
Mr. Holmgren has not been the sole high-profile gaming executive to be researched over insider trading allegations in the past couple of years. His trial began in April or two years following the regulatory body launched its probe.
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