Anders Holmgren, the former CEO of Cherry AB Online Gambling Operator has been acquitted of the insider trading charges. The grave charges were imposed on him and consequentially he was ousted from the company. The Swedish Online Operator Cherry AB sacked its CEO in May 2018. The decision came after he was arrested for serious insider trading.
He was accused of illegally snapping close to 200K shares of Cherry AB that was worth around whopping $1.4m. It was reported that the incident took place between Profit Warning of the company in November 2017 and the announcement of the Profit in April 2018. The result was announced in April 2018 that the Q1 Results are better than anticipated by the market.
During the hearing on Thursday, the Stockholm District Court acquitted Holmgren from the insider trading charges. The court ruled that Thomas Langrot, the Chief Prosecutor and the Swedish Crime Authority have failed to provide any evidence that proves Holmgren had previous knowledge on the performance of Cherry AB. The court also observed that January and February were enough for Andres Holmgren to know and predict the performance of Cherry AB. Thus the court acquitted him of all the illegal insider trading charges that haunted him for more than a year.
Holmgren was very clear from the beginning and told the court that it was his gut feeling that made him purchase more stock of Cherry AB. He said that his intuitions were correct and the share price rose considerably by 12%. The price increased after the Q1 results were announced. This phenomenon prompted the authorities to believe that Holmgren had used insider trading to get such benefits.
The lawyer of Andres Holmgren even argued that the Q1 performance of Cherry AB was good but still it was lower than many expectations of the analysts. The lawyer said that the results were better than the Q1 of 2017 on year on year basis. But there was no guarantee that the shares would jump. The attorney even argued to the court that the share price might even show peculiar behavior and rise even when the Q1 result declines on a year on year basis. If the expectations of the analysts are met then this thing might happen, argued the lawyer in the court.
However, Prosecutor Langrot sounded very disappointed after the judgment, however. Interacting with the media, the senior prosecutor expressed his disagreement with the court and told that the court has taken a wrong decision in this case. He even gave reference to Nasdaq rules and said that analyst’s forecasts are never a decisive assessment for insider information. He continued and said that the Analysts had little idea but Andres Holmgren did insider training.
There has been no comment from the Cherry AB. The company has made itself a private company from May this year. It also does not release frequent updates on the financials. It will be interesting to see whether the company makes any comment on its former CEO and the judgment of the court.