Former Equifax CIO charged with insider trading

Rodiano Bonacci
Marzo 17, 2018

On Sept. 7, Equifax revealed hackers gained access to its data and potentially the personal information of some 143 million USA consumers in the breach which took place from mid-May through July.

In a lawsuit filed Wednesday, the Securities and Exchange Commission said Jun Ying - who at the time was chief information officer of a USA unit of Equifax - sold about 6,800 Equifax shares after he learned of the breach but before the company had announced it publicly, amounting to an illegal trade based on insider information.

Equifax, one of the country's largest credit reporting bureaus, announced in September 2017 that it had suffered a breach exposing the personally identifying information of 143 million Americans.

Wednesday's announcement marks the first criminal charge filed in one of the largest data breaches in history.

When Ying talked privately with his supervisor, the manager's message was cryptic: He told Ying he didn't need to know why he had to comply with Project Sparta at that time, but at some point he would come to understand what was happening. The SEC alleges that before Equifax's public disclosure of the data breach, Ying exercised all of his vested Equifax stock options and then sold the shares, reaping proceeds of almost $1 million. "Starting to put 2 and 2 together".

A former Equifax executive has been charged by United States authorities with insider trading, accused of selling off all of his stock in the credit rating agency last summer before it revealed it had suffered a massive data breach. An hour later, he had sold close to $1 million in stock. In other words, there is even more dirt on this company than ever before. A special committee formed by Equifax's board of directors investigated the matter and cleared those executives of wrongdoing a year ago.

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

Equifax shares plunged in value after the Atlanta-based credit-reporting company disclosed the breach September 7. Given his senior position, Ying had access to confidential details about the breach before they were made public.

Ying was not officially notified of the Equifax data breach until August 30, 2017, two days after he sold his shares.

The Warren letter suggests that Equifax had not disclosed to Congress in any public or private reports that Ying was the focus of an internal probe.

Will Ying be the only Equifax exec to face stock-dumping charges?

Information for this article was contributed by Anders Melin of Bloomberg News.

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