I'm not an expert on the sale of stock in public companies by insiders. But implementing sale instructions after finding a material risk factor and a filing that fails to reveal it looks shady.
(I continue to default to the assumption of sloppiness over bad intent, though even that is harshly punishable, albeit with fines versus jail time.)
 https://www.sec.gov/Archives/edgar/data/50863/00011276021703... Explanation 1
The only difference in this case is the trade size. Huge grant was vested and sold:
This might be related to his employment terms.
In November he sold as much stock as he legally could in his position, not just the amount he optioned.
The minimum he's required to hold is still more than $10M tied up in a single stock. Wanting to diversify one's assets past that level is understandable.
that is criminal.
If you know a risk factor that hasn't been disclosed to investors you shouldn't be able to just point to your pattern of behavior.
(And if he doesn't want equity risk, he should arrange for other compensation...)
“Waiting until the next quarter” is exactly what Equifax did regarding patching.
Intel’s CEO is both guilty of corporate malpractice and willful blindness. The latter term is currently undergoing a renaissance in legal academia and will send many people to jail in the future.
The embargoes are little more than gentleman agreements and I'm not aware of _anyone_ successfully suing for their violation. Google, for instance, technically violated the agreement by disclosing before 1/9/2018. Their lawyers would have advised on any legal risk doing so had.
In comparison, Intel management is required to disclose risk factors (such as a massive f'n vulnerability) that might materially affect the stock price or risk being gone after for insider trading if they sell within the window of them acquiring the knowledge and the public disclosure.
You don't get to refuse to disclose a major risk factor, announce a sale, and sell, then announce the problem once you have unloaded all your shares. That is basically the definition of insider trading.
Might be too soon for BTFD, but call options anyone?
The proper way to do this involves: (a) timing instructions alongside public filings and (b) having a long gap--the longer the better--between instructions being submitted and trades being executed.
Disclaimer: I am not a lawyer. This is not legal nor any other kind of advice. Consult with a lawyer before selling or buying shares as an insider.
I am still able to send back my i9 to amazon, until end of january, and as I am in europe, I also have a 2-year guarantee against faulty or non-conform goods. Not sure if it can apply, but as of today nobody can tell what kind of action we can take against this (I understand the intel claims this is not a bug, but others may beg to differ).
Also, besides any legalities, I am now an angry customer and would probably not buy intel anymore after this.
I expect a firesale in current and possibly next gen Intel processors. They have a healthy margin that should not exist. I want at least a 20% possibly 30% price cut across the board for all Intel processors.
Oh and I expect the CEO to go to prison for a long, long time. Anything that does not involve at least five years in prison sends a wrong message to board rooms everywhere.
Or does this indirectly affect network and disk speed, too?
When investors see that there are operating system fixes for it, and that those fixes apply to AMD and ARM processors, it doesn't seem like a big deal. It doesn't look like there's going to be a massive recall of it, and there are no issues going forward.
So, while it's technically a BFD, as of now, investors are not seeing how this negatively impacts Intel's ability to make money. Plus, Intel's PR team did a good job at damage control.
If anything, it makes newer chips even more compelling.
Obviously this is completely wrong but it's how the general public and walstreet will interpret it.
Plus a huge class action suit from consumers based on false advertising or some related claim.
If the new chips were going to have a 30% performance boost, now it looks like they will have a 50% performance boost. Much more compelling.
I remember at least people in /r/investing gloating how they made a good amount of money waiting for Equifax to drop and then bought it and sold it as it went back up. The same people are waiting for everyone to panic sell their INTC so they can buy it.
This rule does not currently exist.
What would have happened if the AMD developer on the LKML hadn't said "AMD chips aren't affected by [one of the bugs]" before the big public post? The big headlines would have all been about "major class of speculative execution bugs that cause data exfiltration on ARM, AMD, and Intel hardware." Only one of the bugs is Intel-specific (admittedly, the worst one), but even the Project Zero blogpost points out that it mostly focused on attacking Haswell microarchitecture.
So while Intel does have some egg on its face, ARM and AMD aren't exactly out of the woods yet. Side-channel attacks as a result of speculative execution are sort of a well-known idea, but the main big news is that they are practical to exploit and exfiltrate data. I would not be surprised to see more exploits of this type affecting different hardware vendors come out over the next year. The reason why there's so much focus on Intel is because people trying to reverse-engineer the exploit found the message saying "AMD not affected" and didn't realize that AMD is affected by some of the bugs.
Quite likely, whatever internal announcements that would have filtered up to the CEO would have focussed on the fact that other vendors are seeing some impact from these bugs (if nothing else, professional ass-covering). So it's hard to see how the CEO would actually find this information out even internally.
Edit: to put it more succinctly, Intel appears to have been preparing for an announcement of "Major class of speculative execution vulnerabilities [with particular impact to Intel]." However, the way the announcement came out was "Apparent major bug... that's Intel-specific... oh, here's the details of this bug [with related bugs affecting everybody]." That doesn't scream insider trading to me.
As long as the information was not public (in this case presumably it was an embargoed secret under NDA), and that information is material (this information clearly is as Intel's stock is down about 3% today) then it's illegal to trade on that information.
To clarify: it smells bad enough to be investigated... but I wouldn't vote to convict solely on the evidence presented.
> If the message is "everyone is boned," then there's no reason to expect Intel's share price to fall
That's a weak defense agains insider trading: the underlying (and incorrect) assumption is that share prices are 0-sum. It is possible - likely even - for the shares for all 3 to drop if it affects their businesses. It would still be insider trading regardless of who else on the market is affected.
Why wouldn't they say it that way. It seems he was responding to a (justified) overreaction to mark all x86 chips vulnerable and so he pointed out explicitly that AMD wasn't. Why let his company get dragged down along with Intel unnecessary. So it is not like he jumped out on Twitter and broke "the embargo" with something like "Ha, ha, Intel is so screwed".
> the big headlines would have all been about "major class of speculative execution bugs
That's what Intel basically said in their PR response. But so far it seems the Intel (and maybe ARM) only bug (Meltdown) is far more serious than the Specter one. So even saying everyone is vulnerable would have been technically correct but a bit unfair toward AMD, wouldn't you say?
"Intel's CEO Just Sold a Lot of Stock"
I hope their lawyers have been productive these last few months before this all went public.
Throw in Google disclosing the vulnerability to Intel in June, and it looks criminal.
However there are lots of anecdotes from insiders emerging that suggest negligence through substantial changes and cuts in verification that may well have been a primary factor.
By comparison, if spacex had a massive disaster that affected everyone and it was found that they cut their testing team in half to re-appropriate resources 5 years earlier would you still call it an "honest mistake"?
Honestly the two situations seem very similar. One is a vulnerability leading to PII, the other leading to performance degradation. Both could have negative impact on stock price, and both had executives unloading stock just before their announcement.
Insider trading is intentional.
You can't really legislate serious penalties for mistakes, and negligence is really really hard to prove.
In the US, negligence as a tort is a four-pronged test. In the case of Equifax, did they have a duty to protect your PII? Did they breach that duty? Was that breach the proximate cause of your PII being disclosed? Did that disclosure result in an injury?
The US doesn't seem to have much appetite for this kind of regulation though.
You can legislate serious penalties for negligence, of which a great number of PII breaches would, IMHO, be candidates for.
Except you're wrong. Material and non-public are not sufficient conditions for a trade to be considered insider. I know the name and common lore seems to imply it, but legally there's many other details attached.
I could give you at least one counter-example, ie a real court case from 2017 where two specific entities secretly coordinated a trade for stock in one of them on material and non-public information and was determined legal. (Obviously it went to court because people like you abound, who believe that a complex matters like inside trading come down to "material" and "non-public".)
I'm not going to give you that example though, because I take issue with your arrogance, ie authoritatively claiming that someone has zero facts on their side when you have no idea what you're talking about :-)
You're confusing Price and P/E.
My mind-reading skills aren't what they used to be. Some of those downvoted are arguably off-topic or unsubstantive, both of which are frowned upon by HN members. Others, who knows. But then again, this is all speculation.