Lawsuits accuse 49ers CEO Jed York of insider trading, securities violations
San Francisco 49ers CEO Jed York has been sued for alleged insider trading and violations of federal securities laws in connection with his service on the board of a Santa Clara-based online educational company.
In two shareholders’ lawsuits, York and other directors of Chegg Inc. stand accused of concealing the company’s role in helping college students cheat on online exams. The company’s revenue soared during the pandemic, as students learned they could use a Chegg account to get real-time answers to questions on college exams administered online, the lawsuits claim.
Chegg’s revenues plunged and the stock price collapsed at the pandemic’s end, as colleges resumed in-person testing and students no longer could use the company’s products to cheat, according to the suits.
SNIP
Some company officials profited by selling Chegg stock in 2020 and 2021 while the price was high and “before the fraud was exposed,” the lawsuits claim. Rosensweig, the Chegg CEO, sold more than 500,000 shares at a $48 million profit. On two occasions in 2020, according to the lawsuits, York sold 10,000 shares of Chegg he had acquired through directors’ options, making a combined $1.4 million in profit.
LINK (paywall): https://www.sfchronicle.com/sports/49ers/article/suits-accuse-49ers-jed-york-insider-trading-18281155.php
Highlight (from the link): At its peak in February 2021, Chegg stock traded at $113.51. It’s now under $11.
Will the NFL care? This is lawsuit. But it's also punishable under the SEC:
Insider trading results in any one or more of the following legal problems:
· A private lawsuit may be brought against the Insider by a stockholder of the Company. This private action may be brought either by a person who has purchased from, or sold to, an insider or by a stockholder suing in the name of the Company.
· A civil enforcement action could be brought against the Insider by the SEC seeking (a) a monetary penalty (in an amount up to three times the profit gained or the loss avoided); (b) a cease-and-desist order; and (c) an order barring the insider from serving as an officer and director of any public company.
· Especially serious cases could result in a criminal felony prosecution.
LINK: https://www.sec.gov/Archives/edgar/data/1164964/000101968715004168/globalfuture_8k-ex9904.htm
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