San Francisco 49ers CEO Jed York is being sued for alleged insider trading and violations of federal securities laws, the San Francisco Chronicle reported.
Two lawsuits against York, 42, are connected to his role with the board of Chegg Inc., an educational company based in Santa Clara, California.
According to the report, York and other directors of Chegg Inc. are accused of concealing the company’s role in helping college students cheat on online tests. The lawsuits claim the students used a Chegg account to receive instant answers to questions on exams administered online.
The company’s revenue skyrocketed during the pandemic with the boom in online coursework, but revenue and stock prices plummeted when students returned to in-person classes. Stock prices peaked at $113.51 in February 2021 but are currently trading at less than $11.
Chegg CEO Dan Rosensweig, York and other company executives allegedly unloaded stock at the top of the market without informing investors about the extent of the cheating scandal.
The lawsuit claims York made $1.4 million on the sale of 20,000 shares at “artificially inflated prices.”
A Chegg spokesperson told the Chronicle that the lawsuits are “without merit.”
York, who became the 49ers president in 2008, has served on the Chegg board for the past 10 years. According to the Chronicle, he has made a $4.9 million profit on sales of company stock in that time.
Source: www.espn.com