SEC Needs to Quit Taking Executives' Word on Stock Sales

Intel Corp. CEO Brian Krzanich relied on a tried-but-true Wall Street excuse when it was revealed that he sold a large chunk of stock about a month before the chipmaker disclosed a security flaw but months after it was aware of the issue. The sale was planned all along, the company said, so it couldn't under any circumstances be insider trading.

The timing and explanation of the stock sale will most likely draw scrutiny from the Securities and Exchange Commission. At the very least it creates a perception problem. But the bigger problem for investors and the market is that the SEC still permits executives to use the device.

Krzanich sold the stock -- about 644,135 in options and an additional 245,743 shares he previously owned for a profit of nearly $25 million -- on Nov. 29. Intel discovered the security problem, which affects rivals' chips as well but seems to be a bigger issue for Intel, months before. It's clear Krzanich knew about the problem much earlier than November, which makes the stock sales problematic. Intel shares dropped 5 percent when news leaked about the security issue last week.