Questionable Trading Activity at IGT Raises Eyebrows
In February 2012, IGT acquired a company called BringIt, Inc. (“BringIt”) and Gambling911.com can reveal exclusively some of the questions surrounding this business deal.
IGT has previously identified the acquisition in filings with the U.S. Securities and Exchange Commission (SEC), including on page 95 of IGT’s Form 10-K, filed on November 28, 2012.
However, the Company does not appear to have ever disclosed that the investment bank representing BringIt in this sale was Pagemill Partners, a San Francisco-based boutique of which Milledge A. Hart, IV – IGT CEO Patti S. Hart’s husband – is a Managing Director (Pagemill’s website does not identify any personnel with titles senior to “Managing Director”).
Links to portions of Pagemill’s website include a “tombstone” ad commemorating the transaction as well as a “Strategic Relationships” page highlighting the completion of at least one transaction with IGT.
IGT’s definitive proxy statement filed with the SEC on January 23, 2013 makes no mention of this related party transaction. However, on page 22 of the filing, IGT identifies that it has a “written Related Person Transactions Policy.”
The filing goes on to state: “The purpose of this policy is to describe the procedures used to identify, review, approve and disclose, if necessary, any transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) in which (i) IGT was, is or will be a participant, (ii) the aggregate amount involved exceeds $120,000, and (iii) a related person has or will have a material direct or indirect interest.
“For purposes of the policy, a related person is (a) any person who is, or at any time since the beginning of the last fiscal year was, one of our directors or executive officers or a nominee to become a director, (b) any person who is known to be the beneficial owner of more than 5% of IGT’s common stock, (c) any immediate family member of any of the foregoing persons, or (d) any person (other than a tenant or employee) sharing the household of such director, executive officer, nominee or more than 5% beneficial owner of the Company’s common stock.“
The filing continues on page 23 to state: “During fiscal 2012, no related person transactions requiring disclosure in this proxy statement were identified or submitted to the Compensation Committee or the Nominating and Corporate Governance Committee for approval.”
“Presumably the shareholders of any company would expect to know if their CEO had business dealings with a firm of which their spouse is a principal,” a Gambling911.com source suggested.
“It would seem that the transaction in question would clearly qualify as a Related Party Transaction under clauses (ii) and (c) of the IGT Board’s policy. Presumably, shareholders of IGT have every right to question 1) What the Board knew about this transaction? and 2) When did they know it?
The source questioned: “Why has the transparency that the CEO claimed to practice in her January 8, 2012 announcement to IGT employees not a practice available to the owners of the company for matters that involve such potential conflicts of interest, as this related party transaction would appear to involve?”
Gaming analyst-turned advisor Jason Ader is currently engaged in a proxy fight with current management, including CEO Hart.
Ader is spearheading efforts to take control of the board.
“There is a limited amount of gaming expertise (within IGT),” Jason Ader said regarding the current board members.
- Aaron Goldstein, Gambling911.com
