John McAfee's MGT receives SEC subpoena, shares slump

September 19, 2016 12:00 PM EDT

Computer software pioneer John McAfee speaks with reporters outside his hotel in Miami Beach, Florida December 13, 2012. REUTERS/Joe Skipper


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By Noel Randewich and Jim Finkle

(Reuters) - Shares in a firm led by anti-virus software pioneer John McAfee fell 24 percent on Monday after it disclosed that it had received a subpoena from the U.S. Securities and Exchange Commission.

The company, MGT Capital Investments Inc (NYSE: MGT), said in a statement that it was cooperating with the SEC after receiving the subpoena on Thursday and that it does not believe it is or will be subject to any enforcement proceedings.

In May of this year, shares in MGT surged more than 1,200 percent after the mobile gaming company said McAfee would become its chief executive. It said it would enter the fast-growing cyber-security market through acquisitions.

MGT shares fell 97 cents to $2.47 in late-afternoon trade, trimming its market capitalization to about $64 million.

An SEC spokesman declined to say why it subpoenaed MGT and what information it wanted. An MGT spokesman also declined to comment.

With McAfee at the helm, MGT has said it plans to acquire security technologies to address threats to mobile and personal devices.

McAfee was the subject of a media frenzy in 2012 when he fled his home in Belize after police sought to question him about the murder of a neighbor. They ultimately said he was not a suspect.

Chipmaker Intel (NASDAQ: INTC), which bought McAfee Inc for $7.7 billion in 2010, long after its founder had left the company, said recently that it would spin off the unit.

McAfee and MGT recently sued Intel for the right to use the McAfee name.

McAfee said during a conference call on Thursday that he expected MGT to begin generating revenue in the second quarter of next year after launching its first product at the end of 2016. He declined several requests from callers to provide financial projections.

"I really can't say now about future revenue streams, but I certainly tell you that what we are doing and what we are building is going to be monumental," McAfee said in response to one of the questions, from a man identified as an individual investor.

"Good enough for me, man. Good enough," the man replied.

MGT also said it launched a Bitcoin mining operation, which involves using customized computers to earn Bitcoins in return for recording and verifying transactions in the crypto-currency.

(Reporting by Noel Randewich and Jim Finkle; Editing by Dan Grebler)



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