A former senior executive at Equifax Inc. was criminally charged for allegedly selling almost $1 million worth of shares before the company’s announcement last year that it had suffered a massive data breach.
Jun Ying, Equifax’s ex-chief information officer for its U.S. information solutions business, allegedly used confidential information entrusted to him by the company to determine it had been hacked, the Securities and Exchange Commission said in a Wednesday statement. The U.S. Attorney’s office in Atlanta filed criminal charges against Ying, according to a separate statement.
“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 R. 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.”
Equifax disclosed the cyberattack in September, saying it had exposed the personal information of more than 140 million U.S. consumers. The hack has shaken confidence in the Atlanta-based company, which faces more than 240 class-action lawsuits and more than 60 regulatory or government inquiries.
In September, the U.S. Justice Department opened a criminal investigation into whether top officials at Equifax had violated insider trading laws before the breach was disclosed. Three Equifax Inc. senior executives -- Chief Financial Officer John Gamble, and Presidents Joseph Loughran and Rodolfo Ploder -- sold shares worth almost $1.8 million in the days after the company discovered the breach. Equifax has said those three executives had not been informed of the incident when they initiated the sales.
Ying, who was next in line to become the company’s global CIO, avoided more than $117,0000 of losses by selling his shares, the SEC said. Equifax plunged in the days after the breach was disclosed.
This article was provided by Bloomberg News.