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49ers CEO sued for alleged insider trading
San Francisco 49ers chief executive Jed York is being sued over accusations of insider trading related to his role on the board of an online educational company.
SAN FRANCISCO - San Francisco 49ers chief executive Jed York is being sued over accusations of insider trading related to his role on the board of an online educational company.
The San Francisco Chronicle reported that two shareholder lawsuits have been filed against York and other directors of Santa Clara-based Chegg Inc.
The suits allege that York and other directors of Chegg hid the company’s role in helping college students cheat on online exams during the pandemic.
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The company’s revenues and stock price fell sharply once colleges resumed in-person testing and students couldn’t use Chegg to cheat, according to the lawsuits.
The suits also accuse York, Chegg CEO Dan Rosensweig and other company executives of illegal insider trading for selling Chegg stock before investors were told about the extent of the cheating scandal. The suits claim York made $1.4 million in profit on the sale of 20,000 shares "at artificially inflated prices."
Team spokesperson Brian Brokaw didn’t address specifics of the lawsuits, saying in a statement that "the 49ers are proud of the work we accomplished with Chegg to provide scholarships for first-generation students."
A Chegg spokesman told the Chronicle that the "suits are without merit and Chegg is vigorously defending itself."
The Chronicle reported that York has been paid cash and stock worth about $2 million for his part-time work over 10 years as a board member and he made a profit of $4.9 million on sales of company stock.