12 ms·

Didn’t the Intel CEO just sell half of his shares/options? If he knew about these issues isn’t that illegal?

by dzink 9y ago

mizzack 9y ago
Looks like Krzanich sold $39.4M of stock on 11/28. Hard to say when the top brass knew about this flaw. https://finance.yahoo.com/quote/INTC/insider-transactions?p=INTC https://finance.yahoo.com/quote/INTC/insider-transactions?p=...
- ehsankia 9y ago
  I don't understand this attitude that "top brass might not know about it". He's the CEO, isn't his entire job to know what's going on in the company? I know we get this idea that rich people just sit back and take in the money, but isn't the reason they are paid so much in the first place because they have in theory a big responsibility on what happens in the company?
  - mizzack 9y ago
    You're putting words in my mouth. I didn't say he didn't know about it. I said we don't know WHEN he first knew about it, which is important in the context of insider trading.
    - philipov 9y ago
      Even if he knew about it, if it was more than 6 months in advance and he follows all the legally-mandated protocols for setting up a regulated stock trade, isn't he safe? The marvel is that somehow the news was kept from hitting the media until he had finished his trade, and then was revealed immediately after the transaction was complete. I wonder how that coincidence happened.
      - mizzack 9y ago
        The SEC would need to be able to show that Krzanich initiated that rather large selloff based on this inside, privileged info. Given the short document retention policies in place at most companies, this would presumably prove pretty difficult.
    - ehsankia 9y ago
      According to Google, they found out about it in June, and I think it's fair to assume this was shared with Intel shortly after. From the moment it's shared with Intel, it's fair game. It's up to him to setup the company in such a way that important information like this gets to him quickly.
- fatratchet 9y ago
  The article that started most of the discussion listed the first publicly seen patches at middle of november from Microsoft, and one would assume that a bug that could cause major performance impacts like this makes its way upstairs pretty quickly to Intel. https://twitter.com/aionescu/status/930412525111296000 https://twitter.com/aionescu/status/930412525111296000
  - swarnie_ 9y ago
    Intention to sell has to be registered with the SEC 6 months in advanced right?
chx 9y ago
You can be sure there's a young hotshot with sparkling eyes at SEC who is already typing a letter to Mr. Krzanich politely asking about the circumstances of that sell. At the same time, noone is doing eight figures transactions which require reporting to the SEC without talking to a lawyer. Right? Right? They really dislike insider trading, it's one of the few things where even rich people can get imprisoned -- and the typical jail sentence has been steadily climbing up for decades now.
- KindOne 9y ago
  Some people think it was due to the tax code changes.
- hinkley 9y ago
  It's a good thing.
  - kakarot 9y ago
    What is a good thing...?
    - hinkley 9y ago
      Martha Stewart did jail time for insider trading. Turns out the SEC isn't messing around, and they don't hand out community service, probation and fines for this stuff.
      - kakarot 9y ago
        Ahhhh, solid reference. At first I thought you were saying insider trading was a good thing and I was thoroughly confused.
        hinkley 9y ago
        Martha has been off of people's radars for a while now. I may need new material.
cjbprime 9y ago
Yes, it would be, but in practice it's hard to nail people on this. He can argue that he'd already scheduled the sell when he learned about this and it will be difficult to prove otherwise.
- pmoriarty 9y ago
  "it will be difficult to prove otherwise" The SEC could look at internal emails he got about this flaw, and if he got them (and especially if he replied to them) then it's pretty clear he knew about it. They doubtlessly have other investigative tools they can use for this as well.
mindcrime 9y ago
Seems debatable. From what I recall, at least some news about this issue was already public before he sold his shares. And what would be illegal would be trading based on information that isn't public. OTOH, since details are still dribbling out, you could possibly argue that the Intel CEO had more complete information than the public. The sell could also have been scheduled in advance, which would - AFAIK - not violate any insider trading regulations.
- sooheon 9y ago
  Unless the advance scheduling is completely binding, I don't see why that should sidestep insider trading. What's to stop these guys from always having a cascading series of sells and buys 6 mo. in advance, and just cancelling them?
  - eropple 9y ago
    What is to "stop these guys" is the legal parties and officials involved have brains that they can use. The engineer idea of "mwa ha ha, I found a bug, I can walk" is rarely true in practice (n.b.: having quite a lot of money is a different kind of exception).
    - Ajedi32 9y ago
      Basically this: https://xkcd.com/1494/ https://xkcd.com/1494/
  - douglasfshearer 9y ago
    SEC rules also cover cancellation of orders. https://en.wikipedia.org/wiki/SEC_Rule_10b5-1#A_possible_loophole:_canceling_plans https://en.wikipedia.org/wiki/SEC_Rule_10b5-1#A_possible_loo...
  - ashelmire 9y ago
    What, they are never allowed to sell shares then? There are constantly bugs being found in major software and hardware.
ascagnel_ 9y ago
I saw that rumor spreading last night, but have yet to see any trustworthy reporting on any such action. Edit: Here's trustworthy reporting on that action that also predates this announcement: https://www.fool.com/investing/2017/12/19/intels-ceo-just-sold-a-lot-of-stock.aspx https://www.fool.com/investing/2017/12/19/intels-ceo-just-so...
- mox1 9y ago
  I don't think there needs to be much "reporting". Intel has a rule where c-suite and up execs who have been at the company 5+ years must hold a minimum amount of stock. For the CEO, that number is 250,000. The CEO recently exercised options and immediately sold them, holding onto the absolute minimum required (250k). This is all available on the SEC's website, trades like this are reported to the SEC and are considered public information.
  - Idontagree 9y ago
    Small correction, but generally someone like that exercises their options and sells them for profit, keeping their shares that they've had since whenever. In this case, he exercised the options, sold those shares, and then lowered the amount of shares he had beyond that to the absolute minimum (250k).
- 1024core 9y ago
  > that also predates this announcement Apparently, Microsoft has been releasing patches for NT since November, so it isn't exactly predating the bug.
kamaal 9y ago
>>If he knew about these issues Its impossible for him to not know something that is this serious. If he actually did knew about this, then this is a proof of some serious incompetence.
thisisit 9y ago
It depends on the transaction. Recent sells are not updated but all intel insider trades can be found here: http://www.nasdaq.com/symbol/intc/insider-trades http://www.nasdaq.com/symbol/intc/insider-trades Most of trades are "automatic sells" which should mean the trades were setup days in advance. And the selling was reported on the back of the Intel issue only.

Didn’t the Intel CEO just sell half of his shares/options? If he knew about these issues isn’t that illegal?

by dzink 9y ago

Didn’t the Intel CEO just sell half of his shares/options? If he knew about these issues isn’t that illegal?

Looks like Krzanich sold $39.4M of stock on 11/28. Hard to say when the top brass knew about this flaw. https://finance.yahoo.com/quote/INTC/insider-transactions?p=INTC https://finance.yahoo.com/quote/INTC/insider-transactions?p=...

ehsankia 9y ago
I don't understand this attitude that "top brass might not know about it". He's the CEO, isn't his entire job to know what's going on in the company? I know we get this idea that rich people just sit back and take in the money, but isn't the reason they are paid so much in the first place because they have in theory a big responsibility on what happens in the company?
- mizzack 9y ago
  You're putting words in my mouth. I didn't say he didn't know about it. I said we don't know WHEN he first knew about it, which is important in the context of insider trading.
  - philipov 9y ago
    Even if he knew about it, if it was more than 6 months in advance and he follows all the legally-mandated protocols for setting up a regulated stock trade, isn't he safe? The marvel is that somehow the news was kept from hitting the media until he had finished his trade, and then was revealed immediately after the transaction was complete. I wonder how that coincidence happened.
    - mizzack 9y ago
      The SEC would need to be able to show that Krzanich initiated that rather large selloff based on this inside, privileged info. Given the short document retention policies in place at most companies, this would presumably prove pretty difficult.
  - ehsankia 9y ago
    According to Google, they found out about it in June, and I think it's fair to assume this was shared with Intel shortly after. From the moment it's shared with Intel, it's fair game. It's up to him to setup the company in such a way that important information like this gets to him quickly.
fatratchet 9y ago
The article that started most of the discussion listed the first publicly seen patches at middle of november from Microsoft, and one would assume that a bug that could cause major performance impacts like this makes its way upstairs pretty quickly to Intel. https://twitter.com/aionescu/status/930412525111296000 https://twitter.com/aionescu/status/930412525111296000
- swarnie_ 9y ago
  Intention to sell has to be registered with the SEC 6 months in advanced right?

chx 9y ago

You can be sure there's a young hotshot with sparkling eyes at SEC who is already typing a letter to Mr. Krzanich politely asking about the circumstances of that sell. At the same time, noone is doing eight figures transactions which require reporting to the SEC without talking to a lawyer. Right? Right? They really dislike insider trading, it's one of the few things where even rich people can get imprisoned -- and the typical jail sentence has been steadily climbing up for decades now.

KindOne 9y ago
Some people think it was due to the tax code changes.
hinkley 9y ago
It's a good thing.
- kakarot 9y ago
  What is a good thing...?
  - hinkley 9y ago
    Martha Stewart did jail time for insider trading. Turns out the SEC isn't messing around, and they don't hand out community service, probation and fines for this stuff.
    - kakarot 9y ago
      Ahhhh, solid reference. At first I thought you were saying insider trading was a good thing and I was thoroughly confused.
      - hinkley 9y ago
        Martha has been off of people's radars for a while now. I may need new material.

cjbprime 9y ago

Yes, it would be, but in practice it's hard to nail people on this. He can argue that he'd already scheduled the sell when he learned about this and it will be difficult to prove otherwise.

pmoriarty 9y ago
"it will be difficult to prove otherwise" The SEC could look at internal emails he got about this flaw, and if he got them (and especially if he replied to them) then it's pretty clear he knew about it. They doubtlessly have other investigative tools they can use for this as well.

mindcrime 9y ago

Seems debatable. From what I recall, at least some news about this issue was already public before he sold his shares. And what would be illegal would be trading based on information that isn't public. OTOH, since details are still dribbling out, you could possibly argue that the Intel CEO had more complete information than the public. The sell could also have been scheduled in advance, which would - AFAIK - not violate any insider trading regulations.

sooheon 9y ago
Unless the advance scheduling is completely binding, I don't see why that should sidestep insider trading. What's to stop these guys from always having a cascading series of sells and buys 6 mo. in advance, and just cancelling them?
- eropple 9y ago
  What is to "stop these guys" is the legal parties and officials involved have brains that they can use. The engineer idea of "mwa ha ha, I found a bug, I can walk" is rarely true in practice (n.b.: having quite a lot of money is a different kind of exception).
  - Ajedi32 9y ago
    Basically this: https://xkcd.com/1494/ https://xkcd.com/1494/
- douglasfshearer 9y ago
  SEC rules also cover cancellation of orders. https://en.wikipedia.org/wiki/SEC_Rule_10b5-1#A_possible_loophole:_canceling_plans https://en.wikipedia.org/wiki/SEC_Rule_10b5-1#A_possible_loo...
- ashelmire 9y ago
  What, they are never allowed to sell shares then? There are constantly bugs being found in major software and hardware.

ascagnel_ 9y ago

I saw that rumor spreading last night, but have yet to see any trustworthy reporting on any such action. Edit: Here's trustworthy reporting on that action that also predates this announcement: https://www.fool.com/investing/2017/12/19/intels-ceo-just-sold-a-lot-of-stock.aspx https://www.fool.com/investing/2017/12/19/intels-ceo-just-so...

mox1 9y ago
I don't think there needs to be much "reporting". Intel has a rule where c-suite and up execs who have been at the company 5+ years must hold a minimum amount of stock. For the CEO, that number is 250,000. The CEO recently exercised options and immediately sold them, holding onto the absolute minimum required (250k). This is all available on the SEC's website, trades like this are reported to the SEC and are considered public information.
- Idontagree 9y ago
  Small correction, but generally someone like that exercises their options and sells them for profit, keeping their shares that they've had since whenever. In this case, he exercised the options, sold those shares, and then lowered the amount of shares he had beyond that to the absolute minimum (250k).
1024core 9y ago
> that also predates this announcement Apparently, Microsoft has been releasing patches for NT since November, so it isn't exactly predating the bug.

kamaal 9y ago

>>If he knew about these issues Its impossible for him to not know something that is this serious. If he actually did knew about this, then this is a proof of some serious incompetence.

thisisit 9y ago

It depends on the transaction. Recent sells are not updated but all intel insider trades can be found here: http://www.nasdaq.com/symbol/intc/insider-trades http://www.nasdaq.com/symbol/intc/insider-trades Most of trades are "automatic sells" which should mean the trades were setup days in advance. And the selling was reported on the back of the Intel issue only.