Former Equifax CIO faces insider trading charges

Credit reporting company Equifax’s corporate offices are

Credit reporting company Equifax’s corporate offices are

Three other Equifax executives had previously drawn attention for disclosing stock sales just days before the breach was made public.

Jun Ying, a former Equifax employee who was at one point next in line to be the company's global chief information officer, has been charged with insider trading by the US Securities and Exchange Commission. The US Attorney's Office for the Northern District of Georgia is also filing criminal charges against Ying, the SEC said.

"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", Richard Best, director of the SEC's regional office in Atlanta said in a statement.

He added: "Corporate insiders who learn inside information, including information about material cyber intrusions, can not betray shareholders for their own financial benefit".

Equifax detected that hackers had exploited a vulnerability on its website on July 29, 2017, potentially exposing personal information on 148 million consumers.

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Over the next few hours, Ying allegedly received numerous additional indications that Equifax was the company hit by the breach he and his team were responding to.

On Aug. 25, Ying texted a co-worker that the breach he was investigating "sounds bad". He then allegedly sold those Equifax shares for total proceeds of more than $950,000.

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

In its complaint, the SEC said Equifax offered Ying the job of global CIO on September 15. Equifax concluded on October 16 that Ying had violated the company's insider-trading policy and that he should be terminated, prompting his resignation, the SEC said.

Equifax said it reported its findings to the government and is "fully cooperating" with the Department of Justice and the SEC.

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