Norwegian games maker Funcom saw trading of its shares halted on Wednesday, when the company was raided and later charged with market manipulation. By Thursday the shares were climbing again, and company officials seemed to be heading into the weekend confident that they hadn’t done anything wrong.
Current Funcom management also told Oslo newspaper Dagens Næringsliv (DN) that they were “unaware” that the former leadership made any mistakes either. The time frame of the charges lodged against the company mostly cover the period when it was still headed by Trond Arne Aas, who quit the day before the launch of Funcom’s game The Secret World on July 3, 2012.
Erling Ellingsen, communications director for Funcom, told DN that he and his colleagues were now waiting for the results of a further investigation by Norway’s economic crimes unit Økokrim. Officers from Økokrim carried out the raid on Wednesday morning that led to the latest drama at the once highly successful company.
Ellingsen stressed that no individuals within the company are charged, and the company also has reported that none of its current games will be affected by the investigation. The company is currently involved in creating games with Lego of Denmark, and a Lego spokeswoman told DN that its cooperation with Funcom was proceeding “as it should.”
Alleged market manipulation
Økokrim prosecutor Hans Christian Koss confirmed that it was the company itself that was charged with market manipulation and violations of company obligations to maintain lists of company insiders. The company was stocklisted in 2005, and both Norwegian financial regulators and the Oslo Stock Exchange have earlier examined Funcom’s trading activity after a severe dive in its share price in the summer of 2012. The price plummeted after some members of Funcom management at the time already had sold off a large number of shares.
Newspaper Aftenposten recounted that it became known shortly after the management’s stock sales that Funcom’s new game The Secret World had flopped, and Funcom’s share price fell from a top price of NOK 24 to less than NOK 2.50.
DN reported on Thursday that the former chairman of Funcom, Torleif Ahlsand, was called in for questioning by Økokrim on Wednesday. “I don’t fear a thing,” Ahlsand said. “We’re completely clean.”
Ahlsand works for investment company Northzone, which also was paid a call by Økokrim on Wednesday. Northzone was an investor in Funcom for nine years, but sold off its holdings in December 2012. Ahlsand left Funcom’s board in June 2012. DN reported that Northzone had secured itself a gain of NK 135 million on its investment in Funcom.
Funcom’s current management is cooperating with Økokrim, according to Koss. The charges apply to the period from August 2011 until September 2012. Current chief executive Ole Hamran Schreiner took over after Aas left in July 2012 , when the company was harshly criticized for poor communication with analysts and the market. Its share price was falling and a month after the launch of The Secret World, the company reported that sales were far below expectations and half of Funcom’s employees would be laid off.
Funcom was first established in 1993 to develop and produce computer games, and became a leader in multi-player games. Age of Conan, Anarchy Online and The Secret World are among its best-known games.