Company insiders at publishing giants Activision Blizzard and Electronic Arts have been profiting from the firms' buyback programs.
A report from The Washington Post into various US companies - as spotted by GI.biz - shows that employees have been selling their stock following the announcement of buyback schemes for profit. This practice is not illegal, with regulations from the Securities and Exchange Commission (SEC) allowing insiders to do this.
Five Activision Blizzard execs have sold their shares for a cool $430m, according to SEC filings, following the announcement of a buyback scheme in February 2017. CEO Robert Kotick made $180.8m just one day after reveal. The company did not repurchase any of these shares.
The company denies any wrongdoing, saying that Kotick "and other officers and directors continued to own millions of shares, ensuring the alignment of their interests with the rest of our shareholders.
"Consistent with common practice, we don't comment on why we purchase or do not purchase shares, but it is completely incorrect and irresponsible to asset that our Board of Directors' authorisations were entered into for any improper purpose."
Meanwhile, EA's buyback scheme was also announced in 2017 with CEO Andrew Wilson raking in $2.1m, between 12 and 19 per cent more than the day prior. EA spokesperson John Reseburg said that this was done in line with SEC rules.
While the SEC allows this to take place, the organisation's commissioner Robert Jackson said that this practice is tantamount to market manipulation.
"Isn't it market manipulation for a company to say we're doing a buyback and then an officer says, 'I'm going to sell'?" he asked.