Caesars’ Future CEO Receives SEC Subpoena in Trading Probe

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Caesars’ Future CEO Receives SEC Subpoena in Trading Probe

Caesars Entertainment Corp.’s soon-to-be-CEO, Tom Reeg, was subpoenaed by the US Securities and Exchange Commission in relation to a probe into trading in a publicly traded company tied to Eldorado Resorts board member James Hawkins, The New York Post reported.

Tom Reeg was named CEO of Eldorado Resorts in September 2018. The Reno, Nevada-based casino operator is currently in the process of merging with Caesars in a $17.3 billion deal that is expected to close sometime next year. Mr. Reeg will serve as Chief Executive of the combined entity that will be the largest US casino operators with around 60 properties around a number of states.

Eldorado said in a regulatory filing this week that its leader received subpoena in May along with two other members of the company’s board. The filing went on that the SEC sought information about trading in a publicly traded company that was tied to another Eldorado board member, James Hawkins. Mr. Hawkins was, too, subpoenaed.

The New York Post reported that the company whose stock was traded was IRadimed, a provider of magnetic resonance imaging devices. Mr. Hawkins is understood to be serving as a director at the company.

Has Eldorado Notified Caesars About The Subpoenas?

Aside from Mr. Reeg and Mr. Hawkins, Eldorado board member Gary Carano was, too, subpoenaed. The New York Post reported that Eldorado informed Caesars about the subpoenas in June.

According to Eldorado’s recent 475-page filing, the company’s executives had not been notified of any allegation of wrongdoing in relation to IRadimed trading. In addition, the filing did not list the subpoenas as risk factors in relation to the pending merger of Eldorado with Caesars’ gaming and hospitality business.

It is understood that the future CEO of the merged entity will remain on its board. Mr. Carano will, too, remain on the board, while Mr. Hawkins will be out once the merger is finalized. Eldorado President and COO Anthony Carano also received a subpoena by the SEC, according to sources familiar with the matter.

Caesars and Eldorado agreed to merge this past June after several months of negotiations and pressure from Caesars’ largest shareholder, New York activist investor Carl Icahn. According to Mr. Icahn a merger or takeover was the best path forward for the company after it emerged from a long and complex bankruptcy.

Once the deal closes, Eldorado’s current CEO will step in as the leader of the combined casino operator. The merged entity will be headquartered in Reno where Eldorado’s headquarters are currently located. The combined business will be named Caesars as it is the more popular of the two brands.

In a separate round of news, it became known this week that Caesars would no longer pursue a license to develop a casino resort in Japan. It was also reported last month that the company had lost interest in participating in an €8 billion project for the transformation of a defunct international airport near Athens, Greece into a luxury hotel and casino complex.

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The post Caesars’ Future CEO Receives SEC Subpoena in Trading Probe appeared first on Casino News Daily.

 


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