Equifax exec charged with insider trading

Former Equifax exec charged with insider trading

Former Equifax exec charged with insider trading

Credit reporting company Equifax's corporate offices are pictured in Atlanta, U.S., September 8, 2017.

A former Equifax executive has been charged by the Securities and Exchange Commission (SEC) with selling almost $1 million worth of shares before the company announced last year's massive data breach.

Ying is also facing criminal charges from the US Attorney's Office for the Northern District of Georgia, SEC said.

According to the SEC, Jun Ying, who was chief information officer of one of the company's US businesses at the time "allegedly used confidential information entrusted to him by the company to conclude that Equifax had suffered a serious breach" in late August.

"Corporate insiders who learn inside information, including information about material cyber intrusions, can not betray shareholders for their own financial benefit", Best said.

Equifax detected that hackers had exploited a vulnerability on its website on July 29, 2017, potentially exposing personal information on 148 million consumers.

Four executives, including the company's chief financial officer, were exonerated of wrongdoing by an internal investigation carried out by Equifax's board in November. "We take corporate governance and compliance very seriously, and will not tolerate violations of our policies", Equifax said in a statement.

According to the lawsuit Ying sold about 6,800 Equifax shares "after he learned of the breach but before the company had announced it publicly, amounting to an illegal trade based on insider information".

An attorney for Ying didn't immediately return a call for comment. It was one of the largest data breaches in USA history. The next Monday morning, he searched the web to see how a data breach had affected the stock price of competitor Experian. He received proceeds of over $950,000, and realized a gain of over $480,000.

"The alleged actions of this defendant undermine the public's confidence in the nation's stock markets", FBI Special Agent in Charge David J. LeValley said. At 5:27 that afternoon, after speaking privately with the CIO of the main Equifax company, Ying allegedly sent a text message to one of his employees that read: "On the phone with [global CIO]. Otherwise, they face the severe consequences for failing to do so".