Brian Krzanich, chief executive officer of Intel, sold millions of dollars' worth of Intel stock—all he could part with under corporate bylaws—after Intel learned of Meltdown and Spectre, two related families of security flaws in Intel processors.
While an Intel spokesperson told CBS Marketwatch reporter Jeremy Owens that the trades were "unrelated" to the security revelations, and Intel financial filings showed that the stock sales were previously scheduled, Krzanich scheduled those sales on October 30. That's a full five months after researchers informed Intel of the vulnerabilities. And Intel has offered no further explanation of why Krzanich abruptly sold off all the stock he was permitted to.
It is a relatively common practice for CEOs and other executives to put PDP plans into place to avoid being accused of insider trading in case something happens to occur around the time they sell off some shares. This particular sale was filed under Rule 10b5-1(c) with the SEC which is the rule governing planned divestitures. The transaction included 245,743 in stock plus another 644,135 shares he received by exercising his options. By law, the sale was legal.
In this case, Krzanich set up the plan just a month before the shares were sold, in the period between Intel's initial discovery of the exploit, but before its public disclosure. That in itself is not evidence of wrongdoing, and it's worth emphasizing that he is not facing any accusations of impropriety.
As a result of his stock sale, Krzanich received more than $39 million. Intel stock, as of today, is trading at roughly the same price as Krzanich sold stock at, so he did not yield any significant gain from selling before the vulnerability was announced. But the sale may still bring scrutiny from the Securities and Exchange Commission for a number of reasons.
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