Business & Tech

Timing of $24 million stock sale by Intel CEO draws fire

WASHINGTON — Two US lawmakers are calling for an investigation into whether Intel’s CEO, Brian Krzanich, improperly sold company stock after learning of a serious security flaw in the tech giant’s ’ microchips but before it was publicly disclosed.

Intel sent the technology industry scrambling earlier this month when it announced that the microchips powering nearly every computer and smartphone have for years carried fundamental flaws that can be exploited by hackers. The flaws, dubbed Meltdown and Spectre, flow from designs that allowed computers to operate more quickly and efficiently.

‘‘Security is job number one for Intel and our industry,’’ Krzanich said during an industry trade show earlier this week.

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Now some lawmakers are questioning a large stock sale by the company’s chief executive late last year that was made before the news was made public, sending the company’s stock price down.

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‘‘This is exactly the type of report of suspicious trading that the SEC routinely investigates, as well as the DOJ,’’ said Brandon Garrett, a professor at the University of Virginia School of Law.

Intel learned of the security flaw last June and several months later, in late November, Krzanich exercised and sold nearly 900,000 company shares and stock options, making about $24 million, according to Securities and Exchange Commission filings. The sale reduced Krzanich’s holdings in company stock by 50 percent, to the minimum number of shares he’s required to own, according to Intel corporate policy.

Senators Jack Reed, a Rhode Island Democrat, and John Kennedy, a Louisiana Republican, have requested that the Securities and Exchange Commission and the Justice Department investigate the stock sale. It raises ‘‘concerns of potential insider trading,’’ they said in a letter this week to the agencies.