Home Technology News U.S. charges former Equifax executive with insider trading

U.S. charges former Equifax executive with insider trading


WASHINGTON (Reuters) – U.S. authorities have filed criminal and civil charges against a former Equifax (EFX.N) executive over alleged insider trading linked to the credit reporting company’s massive data breach made public last year, officials said on Wednesday.

Jun Ying, the former chief information officer for one of Equifax’s units, faces criminal charges filed by the U.S. Attorney’s Office for the Northern District of Georgia in addition to anti-fraud civil charges filed by the U.S. Securities and Exchange Commission.

The SEC’s complaint alleges Ying used confidential information to determine Equifax had suffered a massive data breach. After realizing the risk to the company, he exercised all his vested Equifax stock options and immediately sold the stock, receiving over $950,000 in proceeds, the SEC said.

Equifax’s interim chief executive said in a statement that the company, once it learned of the sale of the shares, reviewed Ying’s trading activity and concluded he had violated its trading policies. Ying then left the company, according to the statement.

Atlanta-based Equifax said it reported its findings to the government, adding that it is “fully cooperating with the DOJ (Department of Justice) and the SEC, and will continue to do so.”

Lawyers representing Ying declined to comment on Monday.

The SEC said it determined Ying avoided more than $117,000 in losses by selling his stock before Equifax announced publicly on Sept. 7 that the personal information of nearly 150 million Americans had been compromised. The shares slumped as much as 37 percent in the days after that disclosure.

The hack could turn out to be the most costly in corporate history.

Equifax had been aware of the breach since July 29, days before some of its senior executives, including its chief financial officer, sold $1.8 million worth of company shares.

Equifax said the charges on Monday against Ying are unrelated to other stock sales by senior executives. Those sales led to intense scrutiny from media and lawmakers who pressed SEC Chairman Jay Clayton to launch an insider trading investigation.

In November, Equifax said an internal investigation found that four of its executives who sold shares before the credit-reporting firm disclosed the breach were not aware of the incident when they made the trades.

The SEC said it is seeking disgorgement of ill-gotten gains by Ying as well as interest, penalties and injunctive relief.

Additional reporting by Susan Heavey; Editing by Chizu Nomiyama and Paul Simao

Source link


Please enter your comment!
Please enter your name here