GoPro Inc. founders Nicholas and Jill Woodman caused a furor Thursday when they announced that J.P. Morgan had released 5.82 million shares of GoPro stock they had gifted to a foundation and that investors thought were subject to lock up restrictions. It was not clear when the foundation planned to sell the shares.

When the Woodman’s took GoPro public through an IPO earlier this summer, they gifted the shares to The Jill + Nicholas Woodman Foundation.   J.P. Morgan Securities LLC, the lead book-running managers of the company’s June 2014 public sale of 20,470,000 shares of Class A common stock, has agreed to release the charitable organization from a lock-up restriction with respect to the 5,821,739 shares of the company’s Class A common stock gifted to it.  The Woodmans personally contributed the aforementioned shares from their own holdings toward the foundation, effective on October 3, 2014.

“We wake up every morning grateful for the opportunities life has given us,” Nicholas and Jill expressed in a joint statement. “We hope to return the favor as best we can.”

The maneuver, however, prompted immediate condemnation from investors and securities attorneys, who alleged the lock-up restrictions in GoPro’s regulatory filings before the IPO prohibited such transactions.
“The lock-up restriction provides that major shareholders (like the Woodmans) can only transfer shares under certain circumstances — including making a bona fide gift, wrote the law firm of Newman Ferrara LLP in a press release that amounted to an advertisement for plaintiffs. “However, any recipient of the gifted shares must be bound by the terms of the lock-up agreement. JPMorgans assent to release the charity from the lock-up appears to circumvent that provision.”

GoPro shares plummeted nearly 13 percent from $91 per share to $79.13 per share on heavy trading volume within hours of the announcement, before recovering about half that ground to close at $85.46,  down 6.34 percent.

The Woodmans said they would release further information on the foundation in due course.