Sweden's Economic Crimes Bureau has begun an investigation into some of the events surrounding the planned acquisition of The Pirate Bay by Global Gaming Factor X.
Swedish newspaper SvD reported Saturday that authorities are looking for possible insider trading after Global Gaming's stock rose sharply a week before the company announced plans to acquire The Pirate Bay--the best known BitTorrent tracker in the world, which was used by millions to pirate films.
Trading of Global Gaming shares was halted by AktieTorget, a Swedish exchange, on Friday after officials there requested proof that Global Gaming had enough money to complete the sale. Global Gaming has yet to produce the required documentation. Until officials get the proof they need, they said they won't allow the stock to be traded again. The investigation and Friday's halt of trading were unrelated, SvD reported.
The news of the criminal investigation comes as several of the people involved with Global Gaming have cast doubts on the company's ability to pay for The Pirate Bay or, at minimum, get the site up and running anytime in the near future.
Separately, SvD also called into question the veracity of some of Global Gaming's press releases. Global Gaming issued a release on July 31 and claimed that it had rejected an informal US$10 million bid for The Pirate Bay from John Fanning, who along with nephew, Shawn Fanning, founded Napster. Fanning presumably would buy the site after Global Gaming purchased it, but Global Gaming said that it had rejected Fanning's overture.
Again, Global Gaming's stock rose in the days before the company released that information, according to SvD.
According the press release issued by Global Gaming, Fanning's offer had come via Wayne Rosso, who worked for Hans Pandeya, Global Gaming's CEO, for three weeks before leaving. Rosso said that when he walked away, he did so because of doubts about whether Global Gaming had the financing to pull off a Pirate Bay sale.
Rosso said late Friday evening that he never delivered such a message from Fannning.
"The press release was patently false," Rosso told CNET News. He said he told managers at AktieTorget the same thing and said he would testify in court if asked.
Fanning also denied that he ever gave Rosso any offer to deliver to Pandeya, according to SvD's report. So why didn't Fanning come forward when the press release was first circulated?
"I thought it was harmless, but misleading," Fanning told the Swedish newspaper.
Pandeya called Fanning a "liar" in an interview with SvD. He said in an interview with CNET News that the insider trading investigation had nothing to do with him and that no one he knew had done anything wrong. He said the acquisition would go ahead. Global Gaming's leaders apparently will decide on Thursday whether to go ahead with the acquisition.
This article was first published as a blog post on CNET News.
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