Barry Diller, Entertainment mogul and friend of David Geffen, denied that they engaged in any insider trading. Geffen claims this was just a chance bet. Activision BlizzardAccording to some reports, call options now available under investigation by the Justice Department and the Securities and Exchange Commission.

Diller and Geffen along with Diller’s stepson Alex von Furstenberg placed large stakes in Activision stock stocks just days after the company announced it was willing to sell itself to Microsoft. The Wall Street Journal reported Tuesday evening.

Activision stock and those call options saw a huge jump after the public announcement of the merger.

Diller, who confirmed to The Journal that he had been contacted by regulators, in a statement to CNBC, said, “None of us had any knowledge from any person or any source or any anything about a potential acquisition of Activision by Microsoft. “

Diller stated that “we acted on the belief Activision was undervalued, therefore had the potential to go private or be acquired.”

“And, if we had any such information we would never have traded on it – it strains credulity to believe we would have done so 3 days before Microsoft and Activision made their announcement.”

Diller stated to The Journal, “It wasn’t a fortunate bet.”

The Journal reports that the three have an unrealized profit amounting to $60 million on options trade, according to persons familiar with trades. This is based upon Activision shares prices of around $80.

The paper stated that the Justice Department has launched a criminal probe to determine if the option trades violated the insider trading laws. Meanwhile, the SEC is going through a civil investigation.

CNBC reported that the SEC did not comment, while CNBC asked for clarification from Justice Department.

Geffen, Von Furstenberg is Diller’s son. Von Furstenberg was the wife of the famous fashion designer Diane von Furstenberg.

Microsoft did not respond to a request for comment. Activision has not responded to the request for comment.

Diller serves on the Board of Directors of Coca-Cola.

Bobby Kotick, Activision Blizzard CEO, stated last week that he will not run for Coke director and would instead focus his attention on the Microsoft deal.

Additional reporting Steve Kovach