"The implication is that he may have lost an argument with his boss re: the odds of going to jail if that memo was published, and decided to flee the scene of the crime before it went down."

Why so uncharitable? Resigning, rather than participating in something they believe is wrong, is exactly what people with integrity do. Do we have any reason to believe that the argument wasn't about, say, whether sending the memo violates the spirit of the quiet period? Whether current and future investors would be best-served by the memo becoming public? How to spell "revenue"?

It's also the case that at the highest levels of executive decision making, being on the losing side of a major strategic decision often leads to resigning. If you own PR, and the entire PR strategy is overridden by the CEO, you might leave simply because it becomes clear that you can't e effective in that company; the CEO has usurped your role.

That's not a value judgement or anything; it's just life in the big city.

I agree. And the article doesn't suggest that the guy who resigned did anything against the rules; quite the contrary.

And, having drunk some more coffee since this morning, I am now sorry that I tried to summarize the article at all. I fear I may have thereby carried water for poorly-sourced rumors that, for all I know, have no basis in fact.

I would edit or delete my original comment if I could, but I no longer have the power to do so.

I apologize and I promise to try to ignore the Silicon Valley rumor mill even more aggressively in the future.

My limited understanding (after some quick research, and advance warning: reading rule 134 is no help here) is that this is not correct, and that violating the "quiet period" (which is sort of fuzzy compared to other SEC rules) is, like several other rules violations, more of a civil-type issue; fines, recission sales resulting from violation, delay of IPO, lawsuits.

Fraud is still a criminal offense, last time I checked.

So is carrying rabid dogs OR corpses in a cab in the City of London. What does that have to do with whether a particular SEC rules violation is a criminal or civil matter?

Did you know Google got into the same hot water before their IPO? But because pundits liked Google and don't like Groupon, the ledes on all those stories were "IPO might be delayed", not "founder might go to jail".

My point stands on it's own two feet. I never said Groupon was engaged in fraud.

I was responding to the parent comment's proposition that criminal behavior is irrelevant to pre-IPO activity. Fraud is a criminal offense, and fraud is defined as "an intentional deception made for personal gain". The point is: Fraud is always a course of action available to the SEC, FTC and AGs.

Nobody made any such "proposition".

Very good, I stand corrected.

Alas, I left the room during the crucial moment when I could correct my comment and now I can't do it. Otherwise I would certainly do so.

>The implication is that he may have lost an argument with his boss re: the odds of going to jail if that memo was published

Is jail time a consideration though? It may just result in fines. If anyone can clarify this point it'd be useful.

I can't find any historical instances of someone being criminally prosecuted for a quiet-period violation. It appears the usual enforcement is to force the IPO to be delayed after resetting the quiet-period clock.

Presumably there is some level of shenanigans that'd become criminal, if it violated some other bit of securities law (like deliberately manipulating the stock price, or making knowingly false statements to the SEC), but my non-lawyerly searching doesn't turn up any examples.