Federal authorities have charged a senior Equifax executive with insider trading for allegedly selling nearly $1 million worth of company stock 10 days before officials disclosed a website hack that exposed sensitive information for more than 143 million U.S. consumers. The SEC and U.S. Attorney's Office in Atlanta said federal investigations are ongoing.
According to the SEC's complaint, Jun Ying, who was next in line to be the company's global CIO, allegedly used confidential information entrusted to him by the company to conclude that Equifax had suffered a serious breach. "Corporate insiders who learn inside information, including information about material cyber intrusions, can not betray shareholders for their own financial benefit", Richard R. Best, director of the SEC's Atlanta office, said in a statement announcing the charges against Ying.
Equifax, a major consumer credit reporting agency, disclosed past year that hackers had obtained sensitive information, including Social Security numbers and dates of birth, for 143 million people. The firm discovered the breach at the end of July, but customers weren't informed until September.
The SEC noted that at the time of the breach, Ying was often entrusted with nonpublic company information and was a leading candidate to become the global CIO of Equifax, a job he was in fact offered on September 15, the same day the company announced CIO Dave Webb would retire.
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An attorney for Ying didn't immediately return a call for comment.
On Friday, August 25, 2017, Ying texted a co-worker that the breach they were working on "Sounds bad". It is one of the biggest data breaches in history. The following Monday, Ying conducted web searches on the impact of Experian's 2015 data breach on its stock price.
For a CIO at a financial company, Ying didn't exactly do a great job at covering his tracks. The Securities and Exchange Commission on Wednesday also charged Ying with insider trading. According to the SEC, he would have made $117,000 less if he had sold those shares after the breach was made public.
Ying sold those shares on 28 August for about $950,000.
Equifax said it reported its findings to the government and is "fully cooperating" with the Department of Justice and the SEC.