San Francisco 49ers CEO Jed York is facing two lawsuits for insider trading and violations of federal securities laws.
York, who is also the son of the owners of the 49ers, is being sued for his involvement with Chegg Inc., an online-based educational company that grew in popularity during the pandemic, according to the San Francisco Chronicle. He and other directors are being sued for hiding the company’s role in college students cheating during online exams.
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Students were able to cheat by logging onto Chegg while they were taking tests and searching through the company's database of exams or asking an online tutor for answers. Students even referred to this cheating method as "chegging."
As more students learned they could cheat during tests, Chegg’s stock price rose, and court documents show that York and others accused sold their Chegg stock at the height of its price without informing investors how much the company provided students with answers.
York allegedly profited $1.4 million by selling off 20,000 shares “at artificially inflated prices,” according to the lawsuit obtained by the SF Chronicle.
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The lawsuits reportedly accuse the Chegg board members, of which York is a member, of “gross mismanagement,” “unjust enrichment,” and making false statements in “schemes” to profit from the students cheating.
York has a finance degree from Notre Dame and worked as a financial analyst for a year before coming to work at his family-owned NFL franchise in 2005.
A Chegg spokesperson told the SF Chronicle via email that the lawsuits are “without merit and Chegg is vigorously defending itself.”
The insider trading lawsuits come just a week after another top sports person, Tottenham Hotspur owner Joe Lewis, pleaded not guilty for insider trading.
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