The Securities and Exchange Commission charged former Equifax Inc. (NYSE: EFX) executive, Jun Ying with insider trading. The SEC’s says in its complaint that Ying used confidential information entrusted to him regarding the massive data breach last year.
Equifax suffered a massive breach last year that comprised personal information of approximately 148 million U.S. customers. The company did not disclose the knowledge of the breach until September, but it was known that the unauthorized access happened in July 2017.
The breach resulted in more than 240 class-action lawsuits and 60 regulatory or government inquiries, according to Bloomberg. The pressure from investors and officials ultimately led former Equifax CEO, Richard Smith to retire.
According to the SEC, Ying sold his assets in Equifax, totaling upwards of $1 million. The complaint also states that because Ying exercised his positions prior to the breach becoming public knowledge, he was able to avoid more than $117,000 in losses.
“As alleged in our complaint, Ying used confidential information to conclude that his company had suffered a massive data breach, and he dumped his stock before the news went public,” said Richard Best, Director of the SEC’s Atlanta Regional Office. “Corporate insiders who learn inside information, including information about material cyber intrusions, cannot betray shareholders for their own financial benefit.”
Shortly after the breach was made public, the U.S. Department of Justice launched a probe into the company and its top executives. The DOJ uncovered that three of Equifax’s top executives, Chief Financial Officer John Gamble and Presidents Joseph Loughran and Rodolfo Ploder sold $1.8 million worth of shares days after the breach was discovered. Equifax claims those executives were not aware of the breach at the time.
The investigation is being conducted by SEC’s Elizabeth Skola and Justin Jeffries along with the assistance of the U.S. Attorney’s Office of Northern District of Georgia and the Federal Bureau of Investigation.