Markets

United States authorities charge former Equifax executive over insider trading: SEC

United States authorities charge former Equifax executive over insider trading: SEC

A former Equifax executive who sold stock for almost $1 million before the company's massive data breach was publicly announced faces insider trading charges.

The exec allegedly sold his company stock before announcing last year's massive data breach the company experienced.

He was Equifax's worldwide CIO, responsible for its worldwide IT strategy, and next in line to be the company's global CIO, the SEC said. Ying allegedly exercised his stock options and sold his shares, making close to $1 million and avoiding a $117,000 loss when the stock price tanked post-announcement.

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

It is the first time that the U.S. government has pursued insider trading charges against somebody accused of profiting from information about a cyber attack, said David Axelrod, a former SEC trial attorney who is a partner at law firm Ballard Spahr.




The big breach began in mid-May, but was not observed until July 29, according to Equifax. Prosecutors said Ying performed the searches to understand a September 2015 breach of Experian-which, along with Equifax, is one of the three major credit bureaus-and the effect the breach had on Experian's stock price. Equifax publicly disclosed the breach after the market closed on September 7.

The breach compromised sensitive information, including Social Security numbers, of more than 140 million Americans. He received proceeds of over $950,000, and realized a gain of over $480,000.

"Upon learning about Mr. Ying's August sale of Equifax shares, we launched a review of his trading activity, concluded he violated our company's trading policies, separated him from the company and reported our findings to government authorities", Equifax said in an emailed statement.

It wasn't immediately clear whether Ying had an attorney who could comment. "We are fully cooperating with the DOJ and the SEC, and will continue to do so".