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Zynga Executives And Investors Facing Insider Trading Lawsuit

News

by Kyle Hilliard on July 31, 2012 at 08:39 PM

8,308 Views

50 2

Zynga recently experienced a crash in its stock, which was preceded by many of the company's investors and executives cashing out its stock investments in the company for huge sums. Now the company is facing a number of insider trading lawsuits.

The simplified version of the issue here is that investors and executives of Zynga, including founder Marc Pincus and COO John Schappert, all sold their stock at, "exactly the right time," right before the Zynga stock crashed, according to Business Insider's Henry Blodget, which is suspect. Those who cashed out their stock are now facing five lawsuits with accusations of insider trading. The assumed insiders made approximately $516 million before the stock crashed.

For more, check out our previous story:

Zynga Insiders Dumped 43 Million Shares Before Stock Crashed

[via Joystiq]

Email the author Kyle Hilliard, or follow on Twitter, Google+, Facebook, and Game Informer.

Filed under: News, lawsuit, zynga, stock, Words With Friends

Comments

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by Smidgens Tuesday, July 31, 2012 at 09:31 PM

This is so rightly deserved. I hope this finally gets the ball rolling to obliterate the crap stain on gaming's underwear that is Zynga.
by Kai Atlas Tuesday, July 31, 2012 at 09:34 PM

Selling the stocks right before the crash definitely seems fishy. "Money, so they say, is the root of all evil today. But if you ask for a rise it's no surprise that they're giving none away."
by musicalham Tuesday, July 31, 2012 at 09:34 PM

What's insider trading?
by steal Tuesday, July 31, 2012 at 09:35 PM

if what seems blatantly obvious is true, they better see some jail time, not just lawsuits.
by Steve the Random Comment Guy Tuesday, July 31, 2012 at 09:40 PM

The only difference between a duck billed dinosaur and a platypus is one will pay for your lunch and the other will run with your lunch and make you pay.
by DemonGoat Tuesday, July 31, 2012 at 10:00 PM

Die Zynga.......die.
by Chief Beef Tuesday, July 31, 2012 at 10:05 PM

So Zynga has a corporate culture of screwing over the public.

Who would have guessed?
by Warbuff Tuesday, July 31, 2012 at 10:09 PM

| | This blank space represents how much I know about economics, wall street, and stock trading. But it seems to me an impossibility for a collective group of people to A) run a company B) own stocks in the company c) not be able to trade sell/buy stocks without it being insider trading. They ARE the insiders.
by jonathan surber Tuesday, July 31, 2012 at 10:16 PM

Anyone else surprised? No? Moving on. Shame on companies that do this by the way. Puts such a bad taste in the mouth of the consumers and also tends to put them on guard against companies who are in the same type of industry.
by magnaboss44 Tuesday, July 31, 2012 at 10:19 PM

So funny. What idiots. I hope you guys have fun taking turns in prison.
by malcontent79 Tuesday, July 31, 2012 at 10:26 PM

Insider trading is nothing new and happens more than people care to admit, but usually the culprits are a lot smarter about it than this. You can't sell half a billion dollars worth of stock right before a huge crash and not raise some red flags. These guys are all pretty experienced businessmen, I'm just surprised they played this so dumb.
by Boyzby Tuesday, July 31, 2012 at 10:32 PM

Well, who didn't see this coming?
by Zero Tuesday, July 31, 2012 at 10:37 PM

Who didn't see that one coming?

Hope they get it good. *** you Zynga.
by ynoT0312Taz Tuesday, July 31, 2012 at 10:43 PM

Earlier today, i played the word, 'FAIL' on words with friends. Talk about coincidence huh?
by Super Scuba Steve Tuesday, July 31, 2012 at 10:47 PM

I said this back on the article of the founder cashing in before his stocks crashed.

It's freaking Martha Stewart Allover Again.

He beeter get use to Turkey's in his Bunghole!
by Nihlus Kryik Tuesday, July 31, 2012 at 10:58 PM

File this one under "Not Surprising"
by CalamityNess Tuesday, July 31, 2012 at 11:05 PM

muhahahahahahaha thats what they *** get!
by MasterObiJon Tuesday, July 31, 2012 at 11:09 PM

Unfortunatly what will probably happen is a long drawn out legal battle where the lawyers get richer, and after 3 or five years they'll have to pay a piddly fine and bargain down any jail time into a couple months of Country Club Prison. WHAT SHOULD HAPPEN, is they do a minimum of 1 year at REAL federal prison, and all profits they made from the sale be divided up to compensate the other shareholders.
by icewolf74 Tuesday, July 31, 2012 at 11:24 PM

Didn't they learn from Martha Stewart? Hopefully they won't get jail time. Or maybe they should to teach them a lesson? Glad I am not in the stock business. Like the old saying goes: The more money you have, the more problems you have.
by tenzen Tuesday, July 31, 2012 at 11:31 PM

This has seemed very fishy from the start curious to see how everything ends.