Former Equifax executive charged with insider trading

INSIDER TRADING charges were announced Wednesday against a former Equifax executive who sold his shares for nearly US$1 million before the company’s massive data breach was revealed to the public and the stock price plunged.

A federal grand jury on Tuesday indicted Jun Ying, 42, the former chief information officer of Equifax’s US Information Solutions, part of the Atlanta-based credit reporting company. The US Securities and Exchange Commission (SEC), on Wednesday also charged Ying with insider trading.

In an emailed statement, lawyers Douglas Koff and Craig Warkol, who are representing Ying, declined to comment.

The SEC and US Attorney’s Office in Atlanta said that federal investigations are ongoing. Ying is the only former Equifax executive named in Tuesday’s indictment.

Equifax Chief Financial Officer John Gamble and three other executives sold shares worth a combined US$1.8 million days after Equifax discovered suspicious activity on its network – and nearly a month before Ying sold his shares – but Equifax said that an independent committee determined that these other executives did not know of the breach when their trades were made.

A total of about 147.9 million Americans have been impacted by Equifax ’s data breach, which remains the largest exposure of personal information in history. It was disclosed to the public on September 7.

The SEC noted that at the time of the breach, Ying was often entrusted with nonpublic company information and was a leading candidate to become the global chief information officer (CIO) of Equifax, a job he was, in fact, offered on September 15, the same day the company announced CIO Dave Webb would retire.

Federal authorities say Equifax discovered the suspicious activity on its network on July 29. In mid-August, the company changed administrative credentials for many of its internal databases. Ying was aware of these changes, and employees who reported to him were responsible for some of them. On August 25, Ying, along with several employees who reported to him, was asked to help respond, although he was told then that the work involved a potential Equifax customer, not Equifax itself, the indictment says.

“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. “We are fully cooperating with the (DOJ) Department of Justice and the SEC, and will continue to do so.”