Carvana's (CVNA) largest shareholder Ernest Garcia II is facing scrutiny from Delaware's top court over nearly $3.6 billion in stock sales during the Covid pandemic and regulatory challenges, Bloomberg News reported Wednesday, citing court proceedings.
Garcia reportedly sold Carvana shares almost daily for about 300 days starting in October 2020, with sales increasing as the stock price went up.
The sales may have been based on non-public information, particularly before the company disclosed potential legal issues with state regulations, the media outlet reported, citing plaintiff Rhonda Schertz.
Garcia and Carvana reportedly said the trades were part of a preset plan that adjusted as prices rose, but have not yet shared the plan's details with the court. Carvana's legal team said the sales occurred well before any major drops in share price, and another federal court has already dismissed a similar case earlier this year, according to Bloomberg.
Carvana did not immediately respond to a request for comment from MT Newswires.
(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)
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