1y ago

Unity bosses sold stock days before controversial repricing announcement

www.eurogamer.net Unity bosses sold stock days before development fees announcement, raising eyebrows

Unity executives sold thousands of shares in the weeks leading up to last night's hugely controversial announcement it …

Archive.org mirror: https://web.archive.org/web/20230914133443/https://www.eurogamer.net/unity-bosses-sold-stock-days-before-development-fees-announcement-raising-eyebrows

This shit can't be legal. Do we have any lawyers on here?

Technology @lemmy.world

Unity bosses sold stock days before development fees announcement

www.eurogamer.net /unity-bosses-sold-stock-days-before-development-fees-announcement-raising-eyebrows

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Games @sh.itjust.works

Unity bosses sold stock days before development fees announcement, raising eyebrows

www.eurogamer.net /unity-bosses-sold-stock-days-before-development-fees-announcement-raising-eyebrows

281 18

Games @sh.itjust.works

Unity bosses sold stock days before development fees announcement, raising eyebrows

www.eurogamer.net /unity-bosses-sold-stock-days-before-development-fees-announcement-raising-eyebrows

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34 comments

These stories are so dumb/intentionally misleading/outrage bait.
Executives have predefined stock sale schedules at regular intervals. This allows them to convert their equity to cash and avoid conflicts of interest. That is, it’s hard to gain an advantage over the market when you sell exactly the same amount every month for the next 4 years.
Where was everyone’s outrage the other 99% of times this guy sold exactly the same amount of stock?
- So they could just time the announcements after their scheduled sell-off?
  
  The point is this is one sale of many.
  Yes, hypothetically the CEO could influence the date an announcement is made for their own personal gain, but it’s not worth it and there will be many more sell events in the future.
  Long run, trying to scheme an announcement to gain more at 1/100 sales isn’t worth it.
  CEO John Riccitiello shifted 2000 shares last week on 6th September, … part of a trend over the past year where the exec has sold more than 50,000 shares in total and bought none.
  This is a drop in his equity bucket and any gains this article implies are due to “insider trading” will disappear in subsequent events.
  
  Seems like if they wanted to avoid this sort of suspicion, they'd time the announcement for either right before or nowhere near when the scheduled sale would take place.
  But then they wouldn't get to feel like a Bond villain, so…

In the USA that would most likely fit the textbook definition of Insider Trading, which is bigly illegal
- It only looks like insider trading if you forget the definition of insider trading and only read a headline curated to ignore the important details that show small, consistent sales across time regardless of company activities.
  
  Well yeah of course I didn't read the article. I don't give much of a fuck about it. I took the headline at face value ("sold stock days before announcement") and fired off my Lemmy content into the ass crack of this butt land. You're welcome.
  
  What?
  Insider trading is the trading of a public company's stock or other securities (such as bonds or stock options) based on material, nonpublic information about the company
  https://en.m.wikipedia.org/wiki/Insider_trading
- I don't think it's that black and white, since he apparently has sold stock steadily through out the year (and hasn't bought any at all).
  
  I think that makes it worse. It’s obvious that he was doing that with this change in mind. Especially if he didn’t buy any over that period.
- Slap on the wrist fine at most. The rich don't have laws.
  
  He sold over $2mil, so maybe about $20k is fair.

I am not a lawyer but I’ve worked with stock as part of my compensation for years.
Typically you have to schedule your sales on a schedule. Say every 6 months I’ll sell on x date.
Unless legal tells me to change it. It buys or sells on that date. Period. I can’t adjust it on a whim.
If he’s following a schedule then there would be no violation.
If he sold ad hoc, it could be a violation.
- Could he have timed the announcement around his sales, or would that be something that legal would have to have ensured wasn’t happening?
  If this was ongoing and regular for years then yeah it’s nothing. If there are protections in place to ensure announcements aren’t timed around the schedule then that’s even more nothing (as long as it can be proven that procedure was followed).
  It still seems like a system that can easily be manipulated, but yeah if it’s legal then it’s legal and there really can’t be any punishment regardless of ethics or optics…
  
  Certain types of scheduled announcements usually have insider trading blackouts associated with them automatically, like quarterly earnings reports.
  But you ABSOLUTELY can time other announcements favourably around your predefined transactions.
  
  Damn that’s a good question. I honestly don’t have an answer. I’m not high enough level to that type of validation. Basically I have enough knowledge to insider trade but not enough to influence a decision such as changes in pricing or when something will launch.
  I have windows in much I can sell and have to schedule my sales in those windows six months in advance.
  It’s really stupid since I’m trading small dollar amount. 20k a year give or take but the company I work for takes it seriously.

Depends on how far ahead he planned the sale. It does sound like he's getting ready to deploy a golden parachute while the company burns. Clean out his own stock while the price is still high enough and then say, "well shucks, who'd have thought that developers would leave in droves when we instituted micro-transactions for using our engine?" And walk on to overseeing his next disaster.
Seems like it's planned enshitification. Use lower costs and even free for individuals to get market share, then crank up the price once you have a large audience. It'll be interesting to see if and where indie developers jump to.
- It was a scheduled sale. There's a term for it, but it's a fairly normal thing to have set up.
  What it really sounds like is they looked to see that they had a scheduled sale, and then delayed the announcement of the new fees (and the planning of how they'd work) so that the sale price would be higher.
  Or, another alternative here. They looked at the sale price, and thought "gee whiz this is low, how do I boost the stock price higher?" and since this idiot worked on microtransactions for EA, he thought that adding those to Unity made some sort of sense.

this is my shocked face :0

Not to mention he was also the EA CEO before...

Aren’t there laws against this sort of thing? I think that’s significant fraud and he should go to prison
- laws? those only apply to the poor and minority groups.
  
  Of course
- It was a pre-scheduled sale.
  They're announced months in advance and can either trigger on a set date, or at a set stock price. It's more complex than that, and can involve taxes and shit, but the sale itself was above board(ish).
  They likely delayed the announcement of the fees to ensure a higher stock price for the sale, which starts getting into a gray area.
  
  If it’s scheduled, which I know a lot of execs need to do anyways to trade stock, and it’s not just randomized and he knows when those sales happen, and he knows his decision is going to tank the price, he can manipulate what he announces and when it’s announced.
  What’s stopping him from just announcing this, selling the stock in a timer, then waiting just before he’s scheduled to buy stock and announce that he’s changed his mind?
  If I’m the guy who bought that stock from him I’d want to sue. He fucked some sucker over

Probably, but SEC is completely captured and underfunded.

It’s not against the rules because chodes like these guys get to write the rules. If we judge wether or not something is harmful by if it’s legal or not, our civil rights will continue to erode.
- No, this is against the rules. Perhaps the penalties aren't harsh enough, as most financial crimes come with very little actual punishment, but there are penalties.

34 comments