Friday, January 5, 2018

CEO Insider Trading at Intel?

Micah A. emails:
 I don't know if you have noticed or not but the technical world has had a rough week. There is a bug that has been found in all of Intel CPU's since 1995. The bug was discovered and disclosed to Intel through responsible disclosure   in July and then in November the CEO sold  as much stock as he could and the by law of Intel as CEO allowed. This week the bug in Intel's chips was made public I am curious if you know anything about it and why the CEO would not get in trouble for insider trading. I understand everything at a overview from a technical perspective but not from a CEO / finance perspective..

The way the law stands now, it would depend on whether Intel's CEO had a regular structured selling program that was designed well in advance. If so, he could claim that it was a pre-programmed sale and not based on non-public information he was aware of.

That said, more curious is the fact that the news wasn't announced until November. Did the CEO hold up making an announcement until after his pre-programmed sales went through? That would be a breach of fiduciary responsibility in keeping potential stock buyers apprised of all relevant information in a timely manner.

There are many objections to insider trading laws, fiduciary responsibility rules, etc. in libertarian circles. The current government rules have a lot to be desired. However, I do not believe some kind of rules wouldn't exist in a free market and imposed by exchanges if there was no government involved.

The sales by the Intel CEO do raise eyebrows but further details need to be known:

Did he have a pre-planned sell program?

Why was the news not released until November? Was there a justifiable reason for the delay?


1 comment:

  1. I'm not sure of the specifics in this case, but usually, companies don't announce security flaws until they have at least a plan in place to address them. Otherwise, you're telling every hacker in the world that your barn door's open, and you don't even have a plan to buy a latch, much less a lock.