Swedish online gambling company, Cherry AB, announced last week that Anders Holmgren has been terminated from his position as Chief Executive Officer after being arrested for “severe insider trading.” Gunner Lind, the chairman of the Cherry Audit Committee, has been named acting CEO.
Holmgren’s firing was announced Friday after a series of press releases informing the public of the prosecutor’s request to detain Holmgren and of his subsequent arrest. Morten Klein, chairman of the Cherry AB board, had this to say of the now ex-CEO:
Anders Holmgren has made valuable contributions as CEO of Cherry, but he is unable to perform his duties while facing accusations of severe insider trading. The board of directors has today decided to terminate his employment as CEO. In connection therewith, Anders Holmgren will also leave his assignments as board member in Cherry’s subsidiaries. As previously announced, Gunnar Lind is acting CEO and will remain in this position to ascertain that the group develops according to plan until a permanent CEO is appointed.
According to a report from Privata Affarer, Holmgren’s alleged transgression sounds like fairly run-of-the-mill insider trading. Earlier this year, he bought SEK 12 million (currently about $1.45 million) worth of shares in Cherry stock. A mere three weeks after Holmgren made his stock purchase, though, Cherry announced better than expected earnings for the quarter. The news launched the share price from SEK 65.20 on April 13th to a close of SEK 73.20 the following Monday, April 16th, an increase of more than 12 percent.
That bump would have made Holmgren somewhere in the vicinity of SEK 1.47 million (approximately $165,000).
The Holmgren scandal has not really affected Cherry’s stock price significantly. On May 23rd, it went up a fraction of a SEK. On May 24th, perhaps the first day markets could react to what was going on, it closed SEK 1.3 lower, a drop of about 2 percent. On a percentage basis, that’s actually not a completely insignificant decline, but it’s not anything that can’t be made up quickly. Cherry’s share price closed slightly higher on May 25th.
As mentioned, Cherry AB is an online gaming company, though the “About” section of its website is as vague and full of corporate-speak as can be:
Cherry’s strategy is to create, own and develop rapidly expanding and profitable companies in gaming, media and entertainment operations. Our ambition is to develop strong and strategic partnerships by retaining the founders and senior executives who have continued to be active in the organisation.
Foresight, innovation, fresh thinking, organic growth and creation of value are principles guiding the construction and development of the diversified business areas. We have a long-term investment model in the assets and support the business areas as they grow. We endeavor to be a market-leading player in every individual business area in which we operate, while continuously looking for and exploring new business opportunities.
Cherry’s online gaming brands are through its subsidiary ComeOn. ComeOn offers sports betting, online casino, and lottery products on home computers and mobile devices. The company operates out of Malta and has licenses issued by Malta, the UK, and Schleswig-Holstein (Germany).
Among other business units, Cherry also owns XCaliber, a business-to-business (B2B) company that provides online gaming solutions to operators. XCaliber is actually a spinoff of ComeOn and ComeOn is XCaliber’s biggest customer.
