10 August 2023 , 22:19
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The co-owner of Leeds United has been accused of alleged insider trading and federal securities laws violations as part of two lawsuits. The allegations are denied by the 49ers Enterprises.
Jed York is the CEO of San Francisco 49ers and is alleged to have sold 20,000 shares in the online educational company, despite allegedly knowing that it had helped college attendees cheat on exams, according to the lawsuits. Allegedly, York and other directors of the California-based firm concealed the company's role in this alleged fraud.
According to the San Francisco Chronicle, the 43-year-old businessman made a profit of some £1.1million ($1.4m) from the sales of the stock in Santa Clara company in what the lawsuit claims was“at artificially inflated prices”. It is claimed that York was aware of the alleged misconduct of the company, which saw its profits soar during the Covid-19 pandemic.
However, as in-person examinations resumed as restrictions eased, those profits soon plummeted and the company soon saw its share price drop considerably. Mr York is accused of having sold his shares prior to this drop in the firm's revenues.
The lawsuits state that "York engaged in insider sales before the fraud was exposed," adding: “As a trusted member of the board, he conducted little, if any, oversight of Chegg’s engagement in … the cheating misconduct.”
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In a statement released by 49ers spokesperson Brian Brokaw, they said: "The 49ers are proud of the work we accomplished with Chegg to provide scholarships for first-generation students". They also issued a response via email, according to the San Francisco Chronicle, saying: "The recent securities-related lawsuits against Chegg, and in certain cases (its) board of directors, are without merit and Chegg is vigorously defending itself.
"Chegg takes academic integrity very seriously and has invested significant resources to protect it. Chegg has been helping millions of students learn and thrive for many years, including during the pandemic, creating a transformative digital learning platform to improve outcomes."
Andrea Radrizzani sold his majority stake as the owner of Leeds United earlier in the summer (Robbie Jay Barratt - AMA/Getty Images)It is also alleged in the report that York earned £1.57m ($2m) over a decade of sitting on the board at Chegg. York is, of course, now on the board of Leeds United.
He stands alongside Paraag Marathe as the club's co-owner as the leaders of 49ers Enterprises. The company bought the Yorkshire outfit back in July after increasing their previous 44 percent share - which they purchased in 2021 - buying out Andrea Radrizzani as Leeds' majority stakeholders.
The group brought a host of big names from the world of sport with them as minority investors too, as NBA stars Larry Nance Jr. and T.J. McConnell joined golfers Jordan Spieth and Justin Thomas as minority partners. NBA's Russell Westbrook also subsequently announced as a minority shareholder.