Intelsat boss accused of insider trading
January 18, 2021
Intelsat has been hit with another claim of insider dealing over the reallocation of C-band spectrum and the collapse of Intelsat share values. This time the allegation concerns its current chairman and former CEO Dave McGlade.
Intelsat is in Chapter 11 bankruptcy reconstruction.
McGlade is specifically alleged to have sold a significant package of Intelsat shares on November 5th 2019, and the writ states that this was within a few hours after the company’s CEO (Steve Spengler) learned that the Federal Communications Commission (FCC) was leaning towards deciding on organising its own auction of C-band frequencies.
The legal action has been started in an Oakland, California, Federal Court on January 14th.
“This is the quintessential insider trading case,” read the lawsuit filed by law firm Labaton Sucharow on behalf of Intelsat shareholder Walleye Group. “Intelsat, a satellite operator, was successfully pursuing a bet-the-company-deal with the FCC. Its board chairman, defendant David McGlade, and its two largest shareholders, defendants BC Partners and Silver Lake, sold $246 million in stock the very same day they learned the FCC was turning against the deal.”
The core story is carried by the New York Post and extends a similar allegation the newspaper published last March which alleged that two major Intelsat shareholders (BC Partners and Silver Lake Partners) had also sold shares while holding privileged information.
The new action quotes an Intelsat insider who noticed the large volume of “outrageous” trades.