A long-running Class Action against certain Intelsat directors and their investment firms and its then chairman (Dave McGlade) alleging inside trading has been dismissed by a US Appeals Court.

The Class Action, led by a hedge fund Walleye Opportunities Master Fund, and others, had “failed to adequately show that the insiders learned adverse news about [satellite] broadcast frequency licencing prior to selling their shares,” stated the Appeals Court.

The Court found that the two investment firms which were shareholders in Intelsat (Silver Lake Group and BC Partners) as well as Intelsat’s chairman Dave McGlade had not known about a key meeting between the then CEO at Intelsat.

The Court’s verdict stated: “Walleye did not adequately plead that Silver Lake knew about the meeting with the FCC because it did not specifically allege the who, what, when, where, or how Silver Lake learned of the meeting prior to selling Intelsat shares. Walleye did not adequately plead that BC Partners knew about the meeting prior to its trade because Walleye did not allege with particularity any communications between Intelsat and BC Partners. And for similar reasons, Walleye did not adequately plead that McGlade possessed material non-public information.”

The case goes back to 2019 and the discussions between Intelsat (and SES in the C-Band Alliance) and the FCC on the potential private sale of certain satellite C-band frequencies.

The Court documents said: “On the evening of November 4, 2019, Intelsat and CBA representatives requested a meeting with FCC staff for the next morning. Public records show that meetings between the CBA and FCC had occurred more than 50 times between 2018 and 2019. A meeting was scheduled at the FCC offices in Washington, D.C.at 9:00 AM on November 5, 2019. Intelsat CEO Spengler, Stephen Collar, the CEO of SES (another major member of the CBA), other CBA representatives, and Nicholas Degani, senior counsel to Chairman Pai, attended the meeting. Prior to the meeting, Degani emailed Chairman Pai and said, “so …. given where we are, I assume I’d play it cold, no?” Chairman Pai agreed.”

The FCC decision was made to hold an FCC organised auction of the frequencies, and the allegations concern how that information was allegedly made to the defendants in the case. Intelsat’s biggest investors, and McGlade, sold shares after the market closed on November 5th 2019.

Intelsat subsequently entered Chapter 11 bankruptcy, and is now in the process of being acquired by SES.

Other posts by Chris Forrester:

1. Consultant: “European satellite mergers are failing”
2. Ligado attempts to unravel Inmarsat L-band agreement
3. SpaceX complains over South Africa investment rules
4. Vodafone, AST test video call game changer
5. Eutelsat shares hit all time low
6. SpaceX valued at $350bn
7. Sky New Zealand suffering satellite problems
8. Analyst: Space industry worth $1.8tn by 2035
9. Bank reduces AST SpaceMobile’s share target price

Categories: Blogs, Inside Satellite, Policy, Satellite

Tags: Intelsat, SES