It's not illegal, nor is it uncommon for pinkie CEOs to sell shares in their companies before those shares are issued. They get a better price for them that way, because they don't even exist yet. If anybody makes a fuss about it, they just call it "financing" and the people who bought the discounted shares are "financiers." If you've ever wondered what Kennay actually DOES for a living, that's it. Scammy? sure, but perfectly legal and normal in the pinks. That's one of the reasons they're not considered to be "investment grade" securities.
Look at what happened to the PPS of KATX stock right after that "financing" PR was issued, for example.
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