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At least one Director in publicly traded Bwin.Party bought shares immediately after earnings. Amazingly, within a day of those shares purchases, the company started to buy back shares in the open market.
“It’s immoral and unethical for Directors and Management to ‘front run’ a corporate buyback in a matter of hours,” a source tells Gambling911.com.
A la Wikipedia, front running is a practice whereby a stockbroker executing orders on a security for its own account while taking advantage of advance knowledge of pending orders from its customers.
When orders previously submitted by its customers will predictably affect the price of the security, purchasing first for its own account gives the broker an unfair advantage, since it can expect to close out its position at a profit based on the new price level.
Bwin.Party digital entertainment bought back 138,252 ordinary shares on Thursday September 4 2014 at an average price of 93.99p apiece for cancellation.
Helmut Kern, Non Executive Director, bought 60,000 shares in the company on the 3rd September 2014, just one day prior, at a price of 92.42p. The Director now holds 60,000 shares.
“On the surface, there should be red flags raised here,” our source insists.
Perhaps there is a logical explanation. Experts familiar with this type of trading on the London Stock Exchange were not immediately available for comment due to the close of the Friday market.
- Aaron Goldstein, Gambling911.com
