Meta Platforms, or the company we all knew as Facebook, has found itself under the microscope for insider trading allegations and eyebrow-raising stock trades by its top brass.
Insiders sell for many reasons, including liquidity, diversification, and personal finances. However, it becomes suspicious to outsiders only when timing lines up with significant news.
In this article, we’ll break down what’s going on with Meta’s executives and board members and the lawsuits accusing them of dubious trades.
TL;DR
- May 2019 shareholder lawsuit accused Zuckerberg, Sandberg, Thiel and other Meta leaders of insider trading.
- Allegedly, they sold stock while knowing about Cambridge Analytica and other privacy scandals.
- Meta insiders sold $3.9 billion in stock during scandals in 2018.
- Sales were done under Rule 10b5-1 “autopilot” trading plans as legal protection.
- In May 2023, Delaware judge allowed core insider trading claims against Zuckerberg to proceed.
- No formal criminal charges or SEC enforcement actions filed against Meta executives yet.
Insider Trading Lawsuits and Accusations Hit Meta’s Leaders
Back in May 2019, a shareholder lawsuit dropped a bombshell, accusing CEO Mark Zuckerberg, COO Sheryl Sandberg, board member Peter Thiel, and others of insider trading.
This complaint, filed in Delaware, basically claimed that these insiders sold off chunks of stock while knowing about the privacy scandals that would later rock Facebook’s share price.
The lawsuit tied insider sales to the Cambridge Analytica debacle and other privacy breaches that hurt user trust and triggered a $5 billion FTC fine in 2019.
Meta’s response? The company said the lawsuit was “without merit”, denying any wrongdoing.
Fast forward to recent years, and that case has been making waves in court. In 2023, a Delaware judge refused to dismiss the core claims.
Notably, the judge let the insider trading claims against Zuckerberg himself proceed, while tossing out similar claims against some other directors.
The Patterns in Executive Stock Sales
One thing that fuels suspicion is the pattern of stock sales by Meta’s insiders. Let’s talk about who sold what, and when:
Mark Zuckerberg’s Sales
Zuckerberg is Meta’s CEO and also the company’s biggest shareholder. Starting around 2016, he pledged to eventually give away 99% of his Facebook shares to fund philanthropy.
By September 2017, he announced a plan to sell 35–75 million shares (up to ~18% of his stake) over ~18 months to fund the Chan Zuckerberg Initiative.
True to that plan, in 2018 Zuckerberg began selling large blocks of stock nearly every week to raise billions for charity. These were done under pre-scheduled programs.
In fact, between March and July 2018, right after the Cambridge Analytica scandal broke, Facebook insiders sold about $3.9 billion worth of stock, and Zuckerberg accounted for roughly 90% of that volume.
Those sales were part of his pre-announced trading plan, not a sudden dump.
However, later in 2018, as Facebook’s share price tumbled amid a user growth slowdown and market jitters, Mark quietly halted his stock sales.
From October through December 2018, he didn’t sell a single share, reportedly because the price was “too cheap” to keep selling.
This pause raised some questions. If the sales were fully automated and predetermined, how could he just stop?
After a few years of relative quiet, Zuckerberg resumed selling stock in late 2023 and early 2025 as Meta’s stock price surged to new highs.
Sheryl Sandberg’s Sales
Former COO Sheryl Sandberg, often seen as Facebook’s second-in-command, has been one of Silicon Valley’s biggest insider sellers (in terms of total shares cashed out).
Over her 14-year tenure at Facebook, Sandberg regularly sold shares she received as part of her compensation.
She’s said to have offloaded over 75% of her after-tax shares through scheduled sales over the past decade, which is more than 22 million shares sold for about $1.7 billion in total.
By the time Sandberg announced her resignation in 2022, these sales had become a talking point, with some commentators noting that while Facebook weathered storms (and its stock swung wildly), Sandberg had been steadily cashing out along the way.
Other Insiders
Meta’s other executives and board members have had varying trading behaviors.
For example, Facebook board director Peter Thiel famously sold a huge portion of his stock soon after the company’s 2012 IPO (netting roughly $1 billion).
That sale was after the IPO lock-up period expired. And while perfectly legal, it still drew some criticism at the time for the optics of a board member cashing out early.
Another board member, Marc Andreessen, also sold significant shares during Facebook’s growth years.
The 2018 shareholder lawsuit roped in Andreessen and several directors for allegedly selling while knowing about privacy problems, though those specific claims (except against Zuckerberg) didn’t survive in court.
We’ve also seen CFOs and other C-suite members at Meta sell stock under scheduled programs, but usually in far smaller amounts than Zuckerberg or Sandberg.
One notable example: David Fischer, Facebook’s former Chief Revenue Officer, sold sizable chunks in the late 2010s as he vested stock – again, routine diversification.
Rule 10b5-1 Plans in Meta’s Insider Trading Controversies
Meta’s leadership has heavily relied on 10b5-1 plans to manage their stock sales. These plans are a legal safe harbor that allow corporate insiders to set up automatic, pre-scheduled trades of their company’s stock.
By using 10b5-1 plans, they aim to avoid the appearance that any single trade is due to insider info. It’s a bit like putting your stock selling on autopilot.
However, these plans have sparked controversy and scrutiny. Regulators and researchers have noticed some insiders seemed to game the system. For example, adopting a plan and then executing a trade mere days before disclosing bad news.
In theory, a plan is supposed to be adopted in good faith, long before trades occur. But historically there was no required cooling-off period and some execs set up a plan and traded almost immediately.
Amendments to Rule 10b5-1
By December 2022, the SEC passed amendments to tighten Rule 10b5-1.
Now there’s a mandatory cooling-off period (generally 90 days) between when a top executive adopts a plan and when they can first trade.
Insiders also have to certify they aren’t aware of material non-public info when they set the plan, and they must disclose the use of these plans in filings.
Timeline of Meta Insider Trading Controversies & Investigations
To put everything in context, let’s zoom out with a quick timeline of notable insider trading-related events at Meta/Facebook:
2012 (IPO and Aftermath)
Facebook goes public. Early investor and board member Peter Thiel sells the majority of his shares soon after the IPO lock-up expires, netting roughly $1 billion.
2016
Zuckerberg and the board float a plan to create a new class of non-voting shares so he can sell a lot of stock for philanthropy without losing control.
Shareholders sue to block this reclassification. By late 2017, Facebook drops the plan under shareholder pressure.
Zuckerberg instead says Facebook’s business has grown enough that he can fund philanthropy by selling a smaller chunk of his stake.
2017–2018 (Zuck’s Selling Spree)
Zuckerberg begins regular stock sales in 2017 as planned but in early 2018, Facebook is hit by the Cambridge Analytica data scandal.
From March to July 2018, amid that scandal and other crises, eight insiders sell a combined $3.9 billion of stock, with Zuckerberg accounting for 90% of it.
These sales are under 10b5-1 plans, but the timing raises eyebrows.
Facebook’s Q2 2018 earnings (reported in July) reveal slowing growth; the stock plunges 24% in a day, one of the largest value wipe-outs ever.
It doesn’t go unnoticed that Zuckerberg had been steadily selling shares in the lead-up, though he obviously couldn’t have sold after a plunge like that without even more alarm.
Late 2018
Following the stock’s decline in late 2018, Zuckerberg halts his weekly stock sales (around October) as the price dips.
2019 (Shareholder Lawsuit Filed)
On May 1, 2019, a shareholder derivative lawsuit is filed in Delaware Chancery Court accusing Zuckerberg, Sandberg, Thiel, Andreessen, and other directors of insider trading and fiduciary duty breaches.
Around this time, Facebook anticipates a record-breaking $5 billion FTC fine for privacy violations–news that certainly would have impacted insider knowledge and trading considerations.
2020–2021
Facebook’s stock soars to new heights (especially during the 2020–21 tech boom). Meanwhile, Rule 10b5-1 plans come under national scrutiny – the SEC proposes new rules in 2021 to clamp down on abuses.
2022
In June, Sheryl Sandberg announces she’s stepping down as COO. Reports highlight her decade of stock sales totaling ~$1.7 billion.
She leaves with a remaining stake, but her legacy as one of the biggest insider sellers is noted in the press.
Also in 2022, the SEC finalizes new 10b5-1 rules and the DOJ brings its first criminal case for misuse of a trading plan.
2023 (Legal Developments)
The Delaware insider trading lawsuit advances. In May 2023, Judge Travis Laster denies motions to dismiss the core claims against Meta’s leaders.
2024–2025 (Zuck Sells Again)
With Meta’s share price reaching lofty levels (it rebounded strongly as the company cut costs and embraced AI), Mark Zuckerberg initiates a new 10b5-1 trading plan and resumes selling in late 2023.
By the first quarter of 2025, he’s consistently selling tens of thousands of shares per week. These sales are fully disclosed and presumably in compliance with the updated rules.
The Takeaway: Confirmed Allegations Amid a Climate of Scrutiny
Stepping back, what do we know for sure about insider trading and Meta? Confirmed cases are relatively scarce.
There’s no smoking-gun insider trading bust where a Meta executive was led away in handcuffs, nor a settled SEC insider trading charge naming a Meta insider.
What we have instead are serious allegations in civil litigation and a lot of smoke that has drawn regulatory attention.
A group of determined shareholders have assembled an extensive case claiming Meta’s leadership (Zuckerberg above all) privately profited by selling stock ahead of crises and that case is moving toward trial in 2025.
So, while Meta Platforms Inc. has not been formally charged with insider trading violations by authorities, it faces credible allegations that warrant attention.