49ers CEO Jed York faces high-stakes allegations of insider trading amid Chegg college cheating scandal
York allegedly inflated the stocks which allowed him to earn millions of dollars in revenue.
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San Francisco 49ers CEO Jed York (Image via The San Francisco Chronicle)
San Francisco 49ers CEO Jed York has some varied business interests. However, it’s one of those that might end up leading him into trouble.
York, 43, is reportedly being sued for alleged insider trading and violations of federal securities laws. His involvement in the educational company named Chegg, Inc., could end up souring his credentials.
Per the reports, York and other board members of the company provided help to college students cheating on online tests. The lawsuit claimed that the students could log into their Chegg accounts and receive answers instantaneously.
The company’s revenue peaked during the COVID-19 pandemic. As institutes closed for safety concerns, more and more students turned to online study sessions. Chegg’s stocks were at an all-time high in February 2021, with one portion going for $113.51. However, it plummeted after the colleges reopened and now sits at around $11.
According to the San Francisco Chronicle, Jed York allegedly unloaded his stocks by artificially inflating prices and making a profit of around $1.4 million. Despite all the allegations, a Chegg spokesperson told the Chronicle that the lawsuits are “without merit.” In response to the inquiry, the San Francisco 49ers replied as per the Chronicle. “The 49ers are proud of the work we accomplished with Chegg to provide scholarships for first-generation students.”
Jed York has been a board member of Chegg Inc. for a decade. The Chronicle revealed that during that time; the NFL team owner made a profit of around $4.9 million on sales of company stock.
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What is Chegg Inc. for which Jed York may face court charges?
As previously mentioned, Chegg is an educational platform, and its headquarters are located in Santa Clara, California. However, most of its 70,000 experts are based in India.
As per the lawsuit explained in the Chronicle, students realized they could log into Chegg during exams. They can ask any tutor or browse its database of 46 million textbooks to find their desired answers.
A survey by Forbes magazine revealed the documented experiences of several students who use or, at some point, use Chegg. A University of Florida sophomore majoring in finance claimed, “I use Chegg to get the answers.” A University of Portland student even admitted to using the platform for cheating. However, out of 54 people who were interviewed for the study, only four confessed to cheating.
The CEO of Chegg Inc., Dan Rosensweig, told Forbes that his application is not built for cheating. His point of view is to help the students with detailed answers to problems.
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