Senators Urge SEC, DOJ to Investigate Intel CEO’s Stock Sales Despite Chip Vulnerabilities Knowledge
CEO sold millions of dollars worth of Intel stock after the company learned of so-called Meltdown and Spectre security gaps, but before the vulnerabilities were made public
WASHINGTON, DC - U.S. Senators Jack Reed (D-RI) and John Kennedy (R-LA) today asked the U.S. Department of Justice (DOJ) and U.S. Securities & Exchange Commission (SEC) to investigate the sale of millions of stock and options by Intel Chief Executive Officer Brian Krzanich while the company was handling concerns about security vulnerabilities in its chips, but before the information was made public. According to the Wall Street Journal: “The trade took place on Nov. 29, nearly six months after Intel was informed about the vulnerabilities, which could enable hackers to access user data in chips made by Intel and others. Mr. Krzanich sold shares and exercised stock options worth a total of $39 million, netting him nearly $25 million, according to regulatory filings made at the time.”
An Intel spokesperson stated last week that: “Brian’s sale is unrelated. It was made pursuant to a pre-arranged stock sale plan with an automated sale schedule. He continues to hold shares in line with corporate guidelines.”
In their bipartisan letter, the Senators expressed concern about potential insider trading violations, writing:
Dear Chairman Clayton and Attorney General Sessions:
We write to request that the Securities and Exchange Commission and the Department of Justice investigate the alarming reports that Intel’s Chief Executive Officer sold more than $20 million of his Intel securities on November 29, 2017. While news reports suggest that these securities were sold pursuant to an automatic trading plan, known as a Rule 10b5-1 plan, we are disturbed by additional reports that the instructions for these securities transactions were adopted on October 30, 2017, which is before the public was made aware of serious cybersecurity flaws in Intel’s chips but months after Google informed Intel in June of these security vulnerabilities.
These reports are troubling not only because of the risk to nearly all phones and computers, but also because these reports raise concerns of potential insider trading. We request that you conduct a thorough examination of whether any insider trading laws were violated. Furthermore, if you uncover such violations through your examination, we expect you to enforce our laws to the fullest extent possible.
We thank you for your consideration, and we request periodic updates on your progress.