49ers CEO Jed York being sued for alleged insider trading

San Francisco 49ers CEO Jed York is facing multiple lawsuits in light of allegations of insider trading, according to the San Francisco Chronicle’s Lance Williams and Ron Kroichick. York is one of the board members for the company Chegg, which is at the center of the situation.

Two lawsuits allege York and other directors at Chegg covered up “the company’s role in helping college students cheat on online exams,” according to the Chronicle. During the pandemic — when many colleges turned to remote learning — students found out they could use a Chegg account to get answers on tests in real-time during online exams. As a result, the company’s stock greatly increased.

However, after students returned to the classrooms and took tests in-person again, Chegg’s stock bottomed out. York and others allegedly didn’t tell investors they were selling their stock at the top of the market, and the lawsuits say he sold 20,000 shares for $1.4 million at “artificially inflated prices.”

The lawsuits also accuse Chegg’s board of “gross mismanagement,” “unjust enrichment” and “making false and misleading statements in SEC filings in connection with Chegg’s ‘schemes’ to profit from the cheating scandal,” according to the Chronicle.

The 49ers sent the newspaper a statement, but didn’t address the Chronicle’s questions about the lawsuits.

“The 49ers are proud of the work we accomplished with Chegg to provide scholarships for first-generation students,” spokesperson Brian Brokaw said.

Chegg also provided a statement to the Chronicle regarding the lawsuits and denied the accusations.

“The recent securities-related lawsuits against Chegg, and in certain cases its board of directors, are without merit and Chegg is vigorously defending itself,” a spokesperson said. “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.”

York, a Notre Dame graduate, started as the Vice President of the 49ers in 2005 and took over as President and CEO in 2008 but was replaced as team president in 2012. However, he remained the CEO. He’s also a co-owner and board member of Leeds United FC after 49ers Enterprises bought shares in the club in 2018. York has been on Chegg’s board for 10 years.

Pro Football Talk’s Mike Florio added York could come under scrutiny as a result of the NFL’s personal conduct policy if the accusations prove to be true.

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