Lawmakers demand probe into Intel CEO’s stock sales
SAN FRANCISCO (AP) — Two U.S. lawmakers are asking federal regulators to open an investigation into stock sales that reaped a $25 million profit for Intel’s CEO several weeks before the company disclosed a serious security flaw threatening millions of computers, phones and other devices.
Sen. Jack Reed, a Rhode Island Democrat, and Sen. John Kennedy, a Louisiana Republican, made the demand in a letter sent Tuesday to the Securities and Exchange Commission and the Justice Department.
They told the agencies that they were troubled by a series of stock sales that Intel CEO Brian Krzanich completed Nov. 29. The trades were made at time that Intel knew about security bugs that weren’t disclosed until last week.
“We request that you conduct a thorough examination of whether any insider trading laws were violated,” Reed and Kennedy wrote.
Intel said it will cooperate with any investigation. The SEC declined to comment on the letter and the Justice Department didn’t immediately respond to a request for comment.
Krzanich’s stock sales were made as part of an automated trading program designed to eliminate any questions about the timing of transactions made by top corporate executives. But Krzanich’s program wasn’t adopted until Oct. 30, about four months after Intel was first informed of the security bugs affecting its products.
Any investigation into Krzanich’s sales would likely examine the motives for adopting a trading program at the time.
Despite the concerns raised by last week’s disclosure about the security risks. Intel’s stock isn’t worth that much less than when Krzanich sold his stock. The company’s shares closed at $43.62 Tuesday; Krzanich sold his stock at prices ranging from $44.05 and $44.56.
Krzanich held on to 250,000 shares of Intel stock, the minimum that the company requires its CEO to own.