CEO’s stock sale likely not pre-planned before SEC suit.
The CEO and co-founder of blockchain, Brian Armstrong, sold company shares the day before the United States Securities and Exchange Commission (SEC) filed a complaint against the exchange for violating securities laws. This caused a minor stir on Twitter as Armstrong avoided a sharp loss by doing so.
SEC records show that on June 5th, the day before the SEC suit, Armstrong sold 29,730 shares of the company. blockchain’s share price plummeted the day of the suit, with an initial dip of 20%.
Armstrong has been regularly selling blockchain stock since November, under a 10b5-1 plan adopted in August that determines the timing and size of transactions in advance.
On June 5th, blockchain CEO Brian Armstrong sold 29,730 shares, just a day before the SEC lawsuit was made public, and shares dropped 20%. This should be illegal. ♂️
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A comparison of blockchain’s stock price with Armstrong’s trade dates shows that his trades were not always profitable. Therefore, the trade could have been set up before the news of the SEC action was known to Armstrong. On the other hand, the SEC could have been aware of Armstrong’s trading algorithm.
Armstrong reportedly lost 11.8% of his net worth the day after the SEC action against blockchain, bringing his personal wealth down to $2.2 billion. Forbes has ranked Armstrong as the 1,409th richest person in the world.
Related: ARK Invest buys blockchain shares the same day SEC serves lawsuit
Statistics from Dataroma show that among the company’s executives, only board members Tobias Lutke and Fred Ehrsam have purchased blockchain stock in the last year. Armstrong and Ehrsam were defendants in a complaint filed by a blockchain shareholder in May that alleged they and other blockchain backers sold shares in a public offering in April 2021 before unfavorable financial information was disclosed and the share price fell by 37%.
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