MELTDOWN & SPECTRE | New Documents Confirm Intel CEO Sold Half His Stock On The Day Vulnerabilities Were Disclosed
On January 3rd this year, it was revealed by a group of security researchers that intel and other chip manufactures had a critical flaw in many of their chips. Dubbed Meltdown and Spectre, the vulnerabilities affected chips manufactured by Intel, AMD and ARM. Anyone using Apple cloud services, Google, Amazon Web Service, or Microsoft products, were potentially at risk.
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There were questions raised by some media outlets at the time about Intel CEO Brian Krzanich selling his shares, even before the vulnerabilities had been disclosed to the public. As you can see the filing below confirms that the shares were to be sold any time after 11/27/2017.
Intel's CEO Just Sold a Lot of Stock | The Motley Fool - 12/19/2017
On Nov. 29, Brian Krzanich, the CEO of chip giant Intel (NASDAQ:INTC), reported several transactions in Intel stock in a Form 4 filing with the SEC. Most of the transactions involved Krzanich exercising employee stock options (these options allowed Krzanich to purchase Intel shares at prices significantly below where they are currently trading) and then immediately selling those shares that he bought at a discount on the open market.
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As the Motley Fool article points out, there is nothing illegal about these transactions as shares are often paid to executives as part of a compensation package, which at some point they will want to cash out. The odd thing about this situation though isn't just the timing of the sale, but also the amount of shares that were sold.
The Motley Fool goes on to explain that Krzanich sold a total of 245,743 shares of the 495,743 he held, leaving him with exactly 250,000 shares. This is an important amount because according to Intel bylaws the minimum amount of shares a CEO needs to hold is 250,000.
The odd thing about the timing of this sale was the fact that just a few months before Intel's CFO, Robert Swan, announced in a memo, reported on by The Oregonian, that he expects to see Intel share price push past $60 by 2021. If this was the case it seems odd that he would have sold nearly half his shares.
CVE-2017-5753: Spectre
CVE-2017-5715: Spectre
CVE-2017-5754: Meltdown
Looking at the Common Vulnerabilities and Exposures (CVE) list shows us that these critical bugs were submitted to the Mitre CVE as early as January 2017.But it wasn't until January 2018, after Spectre and Meltdown were disclosed to the public, that people started to suspect the real reason Krzanich sold his shares when he did.
Intel CEO sold millions in stock after company was informed of vulnerability, before disclosure | Market Watch - 01/04/2018
Intel Corp. Chief Executive Brian Krzanich sold millions of dollars worth of shares after the company was informed of vulnerabilities in its semiconductors but before it was publicly disclosed.
Even after this revelation, it was still unclear when the sale of the shares took place and how long Intel had known about the vulnerabilities. Well, this is where this new piece of evidence come in. An internal memo obtained by a french tech website shows that Intel intended to disclose the vulnerabilities to the Original equipment manufacturer (OEM) on November 29th 2017. This is the same day that Krzanich sold nearly half his shares.
An Intel spokesperson told a number of news agencies in a statement in early January that "Brian’s sale is unrelated. It was made pursuant to a pre-arranged stock sale plan (10b5-1) with an automated sale schedule. He continues to hold shares in-line with corporate guidelines". In light of this new evidence Krzanich and Intel will I'm sure have a hard time trying to justify this sale once more.
Sadly this kind of suspect activity is endemic in a system that is bordering on the fascist business model.
The fact that characters like Krzanich keep escaping justice is testement to the merger of these big corporations and the minions in government.
Nice work @fortified you're on fire this week!
Yes. I bet for every person like this that gets caught there are probably 1000 that don't. In fact, you're probably less likely to be successful in business if you don't do deals like this. It stinks.