Former Equifax executive charged with insider trading before data breach made public

Jeannie Matthews
March 15, 2018

A former executive at Equifax has been indicted for insider trading, accused of pocketing almost a million dollars in stock he cashed in, days before the company announced a massive data breach.

According to the SEC, Ying, who was next in line to be Equifax's global CIO, "used confidential information entrusted to him by the company to conclude that Equifax had suffered a serious breach".

The U.S. Attorney's Office for the Northern District of Georgia today announced parallel criminal charges against Ying.

"Corporate insiders who learn inside information, including information about material cyber intrusions, can not betray shareholders for their own financial benefit", said Richard R. Best, director of the SEC's office in Atlanta, where Equifax is based.

The SEC last month warned companies that executives should not trade on non-public information about breaches. The following Monday, Ying conducted web searches on the impact of Experian's 2015 data breach on its stock price.

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Federal prosecutors announced Wednesday that a grand jury indicted Jun Ying, the former chief information officer of Equifax's U.S. Information Solutions. Had he sold after the breach, he would have lost $117,000, according to a statement from the SEC.

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.

"Ying knew or was reckless in not knowing that the information that Equifax itself was the victim of a major cybersecurity breach was material and nonpublic, and Ying used that information when making these securities transactions". It wasn't until September 7 that Equifax publicly announced the breach which led to the stock falling.

The company said the charges against Ying are unrelated to stock sales by other executives, which led to intense scrutiny from lawmakers who pressed the SEC to launch an insider trading investigation. The company also said driver's license numbers might also have been exposed.

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