Home Security Intel CEO sold shares on same day OEMs informed of bugs: report
Intel CEO sold shares on same day OEMs informed of bugs: report Featured

Intel reportedly warned its OEM partners about the Meltdown and Spectre processor flaws on 29 November, the same day that its chief executive, Brian Krzanich, sold a tranche of stock and options and netted a healthy profit.

The French magazine LeMagIt said it had obtained a secret memorandum sent to Intel's OEMs under an agreement that insisted on confidentiality and non-disclosure.

The memo outlined the disclosure plan: that OEMs would be told on 29 November and a public disclosure would be made on 9 January. The latter date could not be adhered to, as news of the bugs broke prior to that and forced disclosure by others on 3 January.

intel memo

It said that any communications that OEMs sent to the company should be encrypted with its public key, the location of which was provided.

The processor manufacturer has also been accused of selectively informing customers about the flaws.

LeMagIt said that Krzanich had given instructions on 30 October for the sale of the shares and that this transaction was the subject of at least one class action in the US, led by the Boston lawyers Block & Leviton, a company that has been part of the lawsuits against Volkswagen over the emissions scandal known as dieselgate.

A Google advisory shows that the bug was found on 1 June 2017 and a proof-of-concept was created by 22 June.

The two flaws were revealed in the first week of January and affect Intel processors made since 1995.

Meltdown removes the barrier between user applications and sensitive parts of the operating system. Spectre, which is also reportedly found in some AMD and ARM processors, can trick vulnerable applications into leaking the contents of their memory.

intel memo2

LeMagIt said "surprisingly" Intel continued to market the affected processors "and will likely continue to market vulnerable processors for the next year or more. While waiting for a new generation of chips whose design will be immune to Spectrum, the plan... seems to rely on the developers of operating systems".

Patches issued by Intel for the flaws have caused problems to the extent that the company has told users to hold off on using them and to instead wait for a fresh crop of updates. Linux creator Linus Torvalds described the Intel patches as "total garbage".

When news of Krzanich's share sale first broke, the company said that the sale was not related to the two flaws, “Brian’s sale is unrelated,” Intel said. Krzanich “continues to hold shares in line with corporate guidelines".

Photo of Brian Krzanich courtesy Intel; screenshots of Intel memo courtesy LeMagIT

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the sitecame into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

 

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