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Justice Dept investigating Equifax stock sales: report
The Justice Department is said to be investigating possible violations of insider trading laws by top executives at credit reporting firm Equifax.
Bloomberg reported on Monday that investigators are examining stock sales made by three top executives at the company before Equifax disclosed a data breach in which hackers accessed the Social Security numbers and other personal information of as many as 143 million U.S. consumers.
Equifax has been under intense scrutiny for nearly two weeks since disclosing the breach, which went unnoticed for more than a month before it was discovered at the end of July.
Bloomberg was first to report earlier this month that three Equifax executives - Chief Financial Officer John Gamble, President of U.S. Information Solutions Joseph Loughran and President of Workforce Solutions Rodolfo Ploder - sold stock in the company totaling nearly $2 million in the days after the breach was discovered on July 29. These sales are now said to be under criminal scrutiny.
The Equifax probe is reportedly being handled by the U.S. attorney's office in Atlanta, where the credit reporting firm is based. In a statement, a representative for the U.S. attorney's office for the Northern District of Georgia said that it is working with the FBI in its criminal investigation into the breach and the "resulting theft of personal information," but declined to comment further. The FBI previously said that it was "tracking" the Equifax breach.
The company has said that the executives did not know about the breach at the time they made the sales. Nevertheless, the development has prompted scrutiny on Capitol Hill, with a bipartisan pair of lawmakers pressing the company for information on when top executives were notified of the breach.
Last week, Sen. Heidi Heitkamp (D-N.D.) said that if the circumstances surrounding the share sales were true, then "somebody needs to go to jail."
Hanley Chew, a privacy and data security lawyer at Fenwick & West, said last week that the stock sales could trigger a criminal investigation.
"If it turns out that they did have knowledge of the breach and they sold prior to disclosure of the breach not as part of their regular, predetermined trading plan, then we're looking at potential insider trading lawsuits and potential law enforcement investigation," Chew told The Hill.
The company has weathered sustained criticism for the breach, which has also triggered an investigation by the Federal Trade Commission. Late Friday, Equifax announced that its chief information officer and chief security officer were resigning amid the backlash.