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San Francisco 49ers CEO Jed York is being accused of covering up an online college exam cheating scandal as well as insider trading while he was a board member for the online educational company Chegg Inc.
Two shareholders filed lawsuits against York and other members of the board, claiming they covered up the cheating scandal during the COVID-19 pandemic, per the San Francisco Chronicle.
"Chegging," as it has been called, was the term used for the scheme that allowed college students to find answers to test questions using Chegg’s services. The lawsuit claimed that the Chegg board gave false statements to the U.S. Securities and Exchange Commission when the cheating scandal had been discovered.
CEO Jed York of the San Francisco 49ers on the field before the NFC Divisional playoff game against the Dallas Cowboys at Levi’s Stadium on Jan. 22, 2023, in Santa Clara, California. (Michael Zagaris/San Francisco 49ers/Getty Images / Getty Images)
The lawsuit added that the Chegg board kept the scandal going despite knowing about it.
The company’s stock at the time of the COVID-19 pandemic skyrocketed, as online classes became the new normal with colleges needing virtual classrooms to continue educating. Yahoo Finance had Chegg’s stock price as high as $113.96 on Feb. 8, 2021, before falling mightily. The share hasn’t reached at least $30 per share since April 2022.
The insider trading claim, then, stems from the soaring share price during the pandemic. York, as well as Chegg CEO Dan Rosenweig, have been accused of selling off Chegg stock at its top market price prior to the scandal being revealed.
Investors in Chegg were not informed of the crash that was inbound.
"York engaged in insider sales before the fraud was exposed," the lawsuit claims, via the San Francisco Chronicle. "As a trusted member of the board, [York] conducted little, if any, oversight of Chegg’s engagement in… the cheating misconduct.
"His insider sales demonstrate his motive in facilitating and participating in the scheme."
The lawsuit adds that York made $1.4 million after selling 20,000 shares of the company.
CEO Jed York of the San Francisco 49ers on the field before the Los Angeles Rams game at SoFi Stadium on Oct. 30, 2022 in Inglewood, California. (Michael Zagaris/San Francisco 49ers/Getty Images / Getty Images)
"The recent secuirities-related lawsuits against Chegg, and in certain cases its board of directors, are without merit and Chegg is vigorously defending itself," a company spokesperson told the San Francisco Chronicle in a statement. "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."
The San Francisco 49ers did not immediately answer a request to comment to Fox News Digital, though spokesperson Brian Brokaw told the San Francisco Chronicle that "the 49ers are proud of the work we accomplished with Chegg to provide scholarships for first-generation students."
The 49ers partnered with Chegg to award $100,000 in scholarships to first-generation college students in the Bay Area in 2019.
York is the son of John York and Denise DeBartolo York, the owners of the 49ers. He initially served as the team’s vice president in 2005, and has been with the organization ever since, rising the ranks to president and CEO in 2008 when his parents moved to co-chairs.
Jed York of the San Francisco 49ers before the Seahawks game at Lumen Field on Dec. 15, 2022, in Seattle. (Steph Chambers/Getty Images / Getty Images)
York joined Chegg’s board in 2013.