Intelsat’s Spengler denies aiding insider trading

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Steve Spengler, Intelsat’s CEO, firmly denies being the conduit for any alleged insider trading information over the sale of Intelsat stock by certain shareholders and the company’s chairman Dave McGlade.

It has been alleged that two major investors, and Intelsat’s chairman Dave McGlade, sold in total some $260 million (€230m) of Intelsat stock ahead of a collapse in Intelsat’s share price.

A Class Action is still running in the Northern Court of California where allegations of insider trading are being heard against: BC European Capital VIII, BC European Capital-Intelsat Co-Investment, BC European Capital-Intelsat Co-Investment 1, BC Partners LLP, Justin Bateman, CIE Management II Limited, LMBO Europe SAS, Serafina S.A., Raymond Svider, and Silver Lake Partners (and associated investment companies) and Dave McGlade.

Steve Spengler in a filing to Intelsat’s Chapter 11 bankruptcy court on Nov 30 2021 stated that he met Nicholas Degani, senior counsel to the FCC’s then-Chairman Ajit Pai on Nov 5 2019. He was accompanied by SES CEO Steve Collar and Gregg Elias and Jennifer Hindin of lawyers Wiley Rein.

Spengler was cross-examined under oath at the bankruptcy hearing on December 7th but although the questioning was hardly robust he stated to the court that he had not spoken to anyone with information from the November 5th 2019. His evidence was over in a few minutes.

Spengler, in his affidavit to the court, said the November 5th 2019 meeting again presented the merits of the C-Band Alliance, but Spengler said Degani was non-committal, commenting: “Mr. Collar and I did the majority of the talking during the meeting. We focused on the benefits of our proposed market-based approach. We also reported to Mr. Degani on specific actions we were taking to address the FCC’s priorities, including obtaining customer support for increasing the amount of spectrum offered to 280 MHz plus a 20 MHz guard band and committing to make a contribution to the U.S. Treasury out of the net proceeds from our market-based approach. Mr. Degani was reserved and did not say much during the meeting. He did not provide any indication as to what the FCC may decide in the final order, including whether it would be accepting or rejecting our market-based proposal, or when the FCC would make a decision.”

“Immediately after the meeting, Mr. Collar, Mr. Elias, Ms. Hindin, and I had a coffee at a nearby hotel to discuss our reactions. Some suggested Mr. Degani’s change in demeanour could be interpreted as a neutral event. We understood the FCC typically goes quiet when it is preparing to announce a decision. We had heard that a final decision might be imminent, so it was possible the FCC had already determined to go with the market-based approach, did not need anything further from the C-Band Alliance, and Mr. Degani did not want give anything away,” Spengler added.

Spengler told the court that later that same day he met with (then) FCC chairman Ajit Pai at a conference in New York, adding: “We had a friendly exchange but it was not particularly substantive. I reiterated our political efforts, our progress with the 5G carriers, and our willingness to work with the FCC. Chairman Pai said very little. Chairman Pai was aware that I had met with Mr. Degani that morning, but we did not discuss the meeting in any detail.”

Spengler explained that within “a couple of hours” of the meeting he gave updates to Intelsat’s General Counsel (Michelle Bryan) and CFO (David Tolley). He said the first flow of information to investors – or McGlade – was on Nov 14 2019. “I did not discuss the content of, my speculation about, or any other matters pertaining to the November 5th meeting with anyone at BC Partners, anyone at Silver Lake, or David McGlade prior to the block trade of Intelsat stock that occurred the evening of November 5, 2019.”

Spengler added that he was not aware of any attendee at the November 5th 2019 meeting who discussed the content of the meeting with investors or McGlade. Spengler insisted that he did not discuss the meeting with anyone the investors or McGlade “until after the trade had already occurred.”

CFO Tolley, in his letter to the court also on November 30th, also said that he did not communicate anything. However, his statement is somewhat strained in that he was not at the November 5th 2019 meeting.


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