Former Equifax executive charged with insider trading after data breach

Former Equifax executive charged with insider trading after data breach

Former Equifax executive charged with insider trading after data breach

News of the breach was made public September 7, but authorities say Equifax discovered suspicious activity on its network on July 29.

A former senior executive at Equifax Inc. was criminally charged with selling nearly $1 million worth of shares before the company's announcement a year ago that it had suffered a massive data breach.

The U.S. Attorney's Office has also announced parallel criminal charges against Ying.

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

You may remember that Equifax's hacker was said to have exploited an Apache Struts vulnerability (CVE-2017-5638) in the company's online dispute web portal to access personal information without authorisation.

Four executives, including the company's chief financial officer, were exonerated of wrongdoing by an internal investigation carried out by Equifax's board in November. "We take corporate governance and compliance very seriously, and will not tolerate violations of our policies", Equifax said in a statement.

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".

It wasn't immediately clear whether Ying had an attorney who could comment.

On Friday, August 25, 2017, Ying texted a co-worker that the breach they were working on "Sounds bad. We may be the one breached", the Department of Justice said in its statement.

Ying netted almost $1 million and avoided more than $117,000 in losses, according to the SEC in a separate news release.

On Aug. 28, Ying allegedly used his confidential information to sell his shares before the news broke.

He was Equifax's worldwide CIO, responsible for its worldwide IT strategy, and next in line to be the company's global CIO, the SEC said. Ying received proceeds of over $950,000, gaining roughly 480,000.

"These securities transactions were made on the basis of material nonpublic information and breached the duty of trust and confidence that Ying owed to Equifax and its shareholders", prosecutors wrote in Wednesday's complaint.

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