“It Doesn’t Look Good”: Intel CEO In Jeopardy For Selling Stock After Learning Of “Staggering” Flaw
by Tyler Durden
ZeroHedge.com
Mon, 01/08/2018
Six months after Intel was informed about unprecedented vulnerabilities in its chips that could enable hackers to access user data, and which has since emerged as the most “staggering” bug to affect the global semiconductor industry, company CEO Brian Krzanich was quietly selling shares and exercising stock options worth a total of $39 million, netting him nearly $25 million, according to regulatory filings.
The trade, which took place on Nov. 29, has been called “a highly unusual move” that risked attracting regulatory scrutiny, according to lawyers and analysts who spoke to the WSJ. The timing of Krzanich’s sale “is really odd,” said Dan O’Connor, a Ropes & Gray attorney specializing in securities law. “The timing, the size, the unusual nature compared to prior sales—that’s going to get this a lot of scrutiny.”
While the trade took place under an SEC rule that allows officers and directors to prearrange sales of specific numbers of shares at particular times, the experts note that the rule prohibits insiders from setting up such transactions while possessing undisclosed information that might affect the stock price.
Which is precisely what happened in this case.
To be sure, Intel pleads that it followed all the rules: an Intel spokesman said Krzanich’s divestiture was unrelated to the chip security issue and the sale was based on a prearranged trading program. However, in a clear violation of SEC rules, filings show that Krzanich established the divestiture plan about a month before the trade, on Oct. 30, long after Intel learned of the chip vulnerabilities in June.
Oops.
The Rest…HERE
