Former Equifax CIO faces insider trading charges

Illustration by Alex Castro  The Verge

A former high-ranking executive at Equifax (EFX) allegedly sold almost $1 million in company shares more than a week before the company revealed a massive data breach, federal officials said Wednesday.

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 CIO of Equifax, a job he was in fact offered on September 15, the same day the company announced CIO Dave Webb would retire.

Ying is also facing criminal charges from the US Attorney's Office for the Northern District of Georgia, SEC said.

"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. "We may be the one breached".

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.

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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. Offloading the stock helped Ying avoid more than $117,000 in losses, according to the complaint. After realizing the risk to the company, he exercised all his vested Equifax stock options and immediately sold the stock, receiving over $950,000 in proceeds, the SEC said.

Ying wasn't the only employee who sold shares, resulting in several execs getting accused of insider trading.

"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".

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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