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Former Equifax executive charged with insider trading
The Securities and Exchange Commission (SEC) charged a former Equifax executive with insider trading on Wednesday, alleging he sold close to $1 million in company stock after learning of a massive hack of the credit agency.
The SEC alleges that Jun Ying, Equifax's former chief information officer, saved more than $100,000 when he sold his stock in the company after learning of the incident but before the credit bureau announced it had been hacked.
"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 office.
"Corporate insiders who learn inside information, including information about material cyber intrusions, cannot betray shareholders for their own financial benefit."
Equifax announced on Sept. 7 that hackers had accessed the personal information of more than 148 million people in May 2017, including Social Security numbers, credit card information and other sensitive data.
Ying had known as early as Aug. 25 that Equifax had been hacked and that the incident required a major response, according to the SEC complaint. The SEC alleges that Ying, who had been working on Equifax's response to the hack, sold his shares in the company on Aug. 28, before the credit agency revealed the breach.
Ying allegedly sold more than $950,000 in Equifax stock after looking up how a 2015 hack of Experian, a rival credit bureau, affected that company's shares. Ying was allegedly informed about the full extent of the hack on Aug. 29, the day after he sold his Equifax stock. Equifax lawyers told him not to trade his shares in the company soon after, unaware that Ying had already sold them.
Equifax said that it "separated him from the company and reported our findings to government" after learning about Ying's stock sale.
"We are fully cooperating with the [Justice Department] and the SEC, and will continue to do so," Equifax said in a statement. "We take corporate governance and compliance very seriously, and will not tolerate violations of our policies."
Federal official are also investigating other former Equifax executives who sold millions of dollars in company stock in early August, also before Equifax announced the breach but after news of it spread through the company.
An internal Equifax investigation found no wrongdoing from the three former executives.
Several federal and state agencies, including the SEC, Justice Department, Federal Trade Commission and Consumer Financial Protection Bureau, are investigating Equifax's response to the hack.