Prosecutors probing Barry Diller, David Geffen options activity on Activision-Microsoft deal: report
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Federal prosecutors and regulators are looking into options activity made by media mogul Barry Diller, his stepson Alexander von Furstenberg and business magnate David Geffen, in which the three men made options trades on Activision Blizzard just days before Microsoft (NASDAQ:MSFT) announced its intentions to acquire the video game maker. 
The Wall Street Journal, which first reported the inquiry, noted that the three men have an unrealized profit of roughly $60 million, citing people familiar with the matter.
The there men bought options to buy Activision (NASDAQ:ATVI) at $40 on January 14 via J.P. Morgan Chase (NYSE:JPM), when shares were trading at roughly $63, meaning the options were in the money.
In an interview, Diller told The Journal he had been contacted by regulators to see if any of the trades violated insider-trading laws and said, "It was simply a lucky bet. We acted on no information of any kind from anyone. It is one of those coincidences.â
J.P. Morgan reported the trades to regulators and prosecutors after the deal was publicly announced, The Journal added, citing people close to the matter.
Alexander von Furstenberg had previously bought shares of Activision (ATVI) on the notion that it "would either go private, or would be acquired at some point,â Diller added.
The Journal added that the three men spent approximately $108 million on the options, which are now worth roughly $168 million. If the deal closes, they would be worth more, as Activision (ATVI) is currently trading at a significant discount to the proposed purchase price.
Activision (ATVI) shares gained slightly more than 0.5% to $81.50 in premarket trading, while Microsoft (MSFT) gained nearly 3% to $283.88.
Activision and Microsoft did not immediately respond to a request for comment.
Diller is on Coca-Cola's (NYSE:KO) board of directors along with Activision Chief Executive Bobby Kotick and has described Kotick as "a long time friend.â Coca-Cola recently announced that Kotick would be stepping down from its board.
Diller and Geffen have a long-standing friendship, having once worked in the mail room at the William Morris talent agency, the Journal added.
In January, Microsoft (MSFT) announced its intention to buy Activision (ATVI) for almost $69 billion, paying $95 per share in cash.