Current Cherry AB CEO and Betsson co-founder Anders Holmgren is arrested by Swedish eco-crime authorities on “severe insider trading” charges and is fired by Cherry after being bound over on probable cause in an initial hearing.

Former Betsson and current Cherry AB CEO Anders Holmgren has been arrested by Swedish authorities on insider-trading charges. Holmgren was detained on Tuesday, May 22, after a search of Holmgren’s office at Cherry AB by Sweden’s Economic Crime Authority. After a tumultuous week, including four separate press statements, Cherry announced today that Holmgren has been terminated from his position at Cherry, effective immediately, and that a search for a new CEO is already underway.

Cherry AB’s initial statement on May 22 was the first indication of legal trouble beginning to swirl around Holmgren. The statement said: “During the morning, the Swedish Economic Crime Authority has performed a search at the head office of Cherry AB and in relation to this event, the company’s CEO, Anders Holmgren, was arrested. Cherry will fully cooperate with the Economic Crime Authority in the investigation. During the period of the investigation, Gunnar Lind, chairman of the Cherry Audit Committee, will be acting CEO of Cherry.”

Cherry promised follow-ups as more information appeared in the matter, and has, in essence, provided daily updates. On Wednesday, May 23, a Cherry statement advised that a formal detention request had been issued for Holmgren, who was “suspected of severe insider trading”. Cherry AB also said that a detention hearing had been scheduled for Thursday, May 24, indicating that Holmgren had already been detained or had arranged a voluntary surrender to authorities.

A third corporate advisory?on May 24 noted that Holmgren had appeared at the hearing and had been bound over. Cherry AB’s statement offered that the company had “been informed that the Stockholm District Court has detained Anders Holmgren on reasonable grounds suspected for severe insider trading”?[Emphasis Cherry AB].

Holmgren terminated from company

Those reasonable grounds, as adjudged in the hearing, likely translated into Cherry AB’s decision to jettison Holmgren and begin the search for a new CEO. Cherry’s fourth announcement this week pertaining to Holmgren’s arrest offered this: “The Board of Cherry AB [] has resolved to terminate the employment of Anders Holmgren as CEO and President of Cherry. Effective immediately, he will leave the company and the Cherry Group. The process of finding his successor is initiated.”

Morten Klein, chairman of the board of Cherry AB commented: “Anders Holmgren has made valuable contributions as CEO of Cherry, but he is unable to perform his duties while facing accusations of severe insider trading. The board of directors has today decided to terminate his employment as CEO. In connection therewith, Anders Holmgren will also leave his assignments as board member in Cherry’s subsidiaries. As previously announced, Gunnar Lind is acting CEO and will remain in this position to ascertain that the group develops according to plan until a permanent CEO is appointed.”

Lind previously served as Cherry’s CEO from 2006 to 2011 and is also the chairman of the company’s audit committee. He will likely serve as Cherry’s interim CEO until a replacement is named.

Holmgren’s history, case background

Holmgren was the longtime CEO of Betsson, being one of the company’s three co-founders. He served in that role from 2000 to 2011 and remained with the company following its multi-deal hookup with Cherry that began in 2005 and included multiple corporate transactions over several years. Holmgren re-emerged in a CEO role at Cherry AB in January of 2017, and immediately took over the company’s new Malta headquarters.

More recently, however, a stock transaction triggered an investigation by Swedish regulators. According to Sweden’s Privata Affarer (Private Affair), “At the end of March, Anders Holmgren bought shares in Cherry for SEK 12 million”. That followed a profit warning the company issued in November 2017, yet three weeks after Holmgren’s March share purchase, Cherry AB topped its forecast number in its Q1 2018 report by a wide margin.

Insider trading can carry severe penalties in Sweden. Holmgren could face a jail term of between six months and six years if found guilty on the charges.