Meet Chegg's Biggest Backers
Plus, Australia blocks cheating websites. Plus, students cheat Morocco's Medical School exams.
Issue 142
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Meet Chegg’s Top Investors
In Issue 131, we introduced you to a few of the top investors in the publicly traded cheating company Chegg, based on a little news article. After which, a loyal and eagle-eyed reader sent us many more of them.
Not being an investment expert, what we received was difficult to understand, candidly. I asked for help. I still may have - even likely did - get some of the details wrong. As always, if I did, I’m happy to correct it. Many of these companies, for example, have many different, similarly-named funds and affiliations, all with different holdings in Chegg. To a novice, it’s confusing.
Even so, I think I captured the essence of this - that some very big, very institutional investors are backing Chegg at obscene levels - counting on being able to profit from cheating.
Therefore, here, as best as I can calculate, are the top 20 or so profiteers with major Dollars, Pounds or Euro banked in backing cheating, as of August 1.
And when you see the numbers, think “at least” because in most cases, it could be substantially more, even multiple times more:
Baillie Gifford & Co (Edinburgh) - $400 million
Vanguard Group Inc. (Philadelphia) - $300 million
BlackRock Inc (New York City) - $142 million
Artisan Partners Ltd (Milwaukee/Madison) - $130 million
Fred Alger Management LLC (New York City) - $112 million
Capital Research Global Investors (Los Angeles) - $110 million
Wellington Management Group LLP (Boston) - $109 million
Sands Capital Management LLC (Washington, D.C.) - $92 million
Bank of America Corp (Charlotte) - $64 million
Norges Bank (Oslo) - $59 million
Ameriprise Financial Inc - $58 million
ClearBridge LLC (New York City) - $56 million
Granahan Investment Management Inc (Boston) - $55 million
Columbia Wanger Asset Management (Chicago) - $52 million
UBS AG (Zurich) - $52 million
Janus Henderson Group PLC (London) - $50 million
Two Sigma Investments LP (New York City) - $48 million
State Street Corp (Boston) - $46 million
Deutsche Bank AG (Frankfurt) - $43 million
Morgan Stanley (New York City) - $40 million
You get the idea.
Some other names with major investment positions that stood out - you know, for the record:
John Hancock, Goldman Sachs Group Inc, Credit Suisse AG, Janus Henderson Investors, Bank of New York Mellon, Charles Schwab, Fidelity Management, Northern Trust, National Bank of Canada, Mitsubishi UFJ, and AXA.
Then there are the individual investors. Top among them is Daniel Rosensweig, Chegg’s CEO, who owns $40 million in Chegg stock. Andrew Brown, Chegg’s CFO, has $7.5 million in stock. Investor Richard Sarnoff is into Chegg for about $4.8 million and John Paul Fillmore, a - former? - Chegg executive is listed as holding $3.6 million in Chegg stock. Noteworthy too is Paul LeBlanc, who my list says owns $529,000 in Chegg stock. LeBlanc is the President of Southern New Hampshire University.
Then finally, there are the Chegg investors that just blow my mind - investment and pension funds for teachers. No, really:
Kentucky Teachers' Retirement System - $4.5 million
California State Teachers' Retirement - $4 million
State of New York New York State Common Retirement Fund - $13 million
Colorado Public Employees' Retirement Fund - $9.3 million
California Public Employees' Retirement Fund - $5.3 million
(A Florida Retirement Fund) - $3.3 million
Ohio Public Employees Retirement - $1.5 million
Teacher Retirement System of Texas - $630,000
Then there’s a company called “TEACHERS ADVISORS INC” which has some affiliation with Teachers Insurance & Annuity Assoc. (TIAA), which manages the pensions of many public service retirees, including teachers. Together, they appear to have at least $10 million invested in Chegg. And, again, perhaps much, much more. I just can’t tell.
I’m sure I don’t have to say it. But I do not understand how or why a pension fund for teachers is invested in what’s probably the largest cheating facilitator in the country, if not the world.
Do with all that what you will. At least now you know some of the people and institutions planning to profit from industrialized cheating.
Australia Blocks Cheating Websites; I am Disappointed
TEQSA, Australia’s regulatory body charged with enforcing the country’s anti-cheating laws, announced it has blocked 40 illegal cheating websites.
The list is here.
I am not sure whether this is the “imminent” action TEQSA promised recently (see Issue 138) but my guess is that it is.
Probably no one cares what I think about this but I will tell you anyway - I am of mixed minds. Encouraged, but mostly disappointed.
I am encouraged because any action against cheating profiteers is good. TEQSA says the 40 sites they blocked were accessed 450,000 times a month in Australia. First, that’s a staggering insight into the demand for corporate cheating. Second, shutting that down is unquestionably good.
My disappointment rests in the understanding that the blocked websites are, it seems, entirely essay mills. Even though TEQSA described these sites as, “commercial academic cheating sites,” they are but one type of commercial cheating site, a small sliver of commercial academic cheating. Hard to say exactly what portion, but my educated guess is that “essay mills” represent perhaps just one third of “contract cheating.”
Again, going after essay mills is great. But it’s not the same as addressing “contract cheating” any more than cracking down on OxyContin could be seen as fixing a drug problem.
Moreover, these essay mills operating under names such as “essaypro” and whatnot tend to be a) based well outside of Australia and b) operating several storefronts at once, moving and rebranding like the wind. In hitting these players specifically, TEQSA hit the folks who are most difficult to actually stop and are the least likely to care what Australia’s government thinks or does. They will have their actual operations untouched. The actual providers of the illicit and illegal services are probably already back in business.
Good, yes. Productive, maybe not really.
The action by TEQSA also seems to line up with something I’ve seen in the U.K. and in Australia in particular - that “contract cheating” and “essay mills” seem to be thought of interchangeably. As mentioned, they are not.
I’m disappointed because there are contract cheating companies with addresses, with investors, with business partners and marketing deals - companies doing brisk business in Australia. Blocking the sites of those cheating providers would have been a big deal, with actual consequences. But today they sell their cheating services to Australian students just as they did yesterday, just as they will tomorrow. Maybe TEQSA left those big, well-known cheaters alone because they have lawyers and lobbyists and PR agencies. I don’t know.
But I do know that Australia has laws. And that TEQSA has power and could have landed an actual punch. It chose not to.
Med School Exam Cheating in Morocco, With a Note
Note first - I try to balance the geography of coverage in “The Cheat Sheet.” I seek out and often lead with stories from or about United States institutions and issues. The problem is that there just aren’t many, sometimes any.
Right now, I have - no exaggeration - 17 news articles from the U.K., Australia and around the world. I have one from the U.S.
One. That’s not because cheating does not happen here but because we ignore it. We don’t want to talk about it, so we simply don’t. When you write about cheating nearly every day, the pattern is obvious. It’s also a problem.
Anyway, news from Morocco that students were cheating on the country’s entrance exams for medical school. Medical. School.
The students were reportedly sharing exam questions and answers on WhatsApp. Big surprise.
Morocco’s government leader in charge of such things said the incident:
directly affects the public college and the dignity of the Moroccan student of medicine, pharmacy, and dentistry.