Equifax Executives Sold Stock Before Revelation Of Security Breach
By Ryan Velez
Customers across the country have plenty of reason to be concerned about their personal info after credit-reporting service Equifax revealed that they discovered a security breach that could potentially compromise details of over 143 million U.S. consumers. Something that has people super skeptical about the situation, according to Bloomberg, is the fact that three senior executives sold shares worth nearly $1.8 million in the days after the breach was discovered.
According to an official statement from the company, the executives had not been informed of the incident at the time the breach was discovered. The three “sold a small percentage of their Equifax shares,” Ines Gutzmer, a spokeswoman for the Atlanta-based company, said in an emailed statement. They “had no knowledge that an intrusion had occurred at the time.”
Regulatory filings show that on Aug. 1, Chief Financial Officer John Gamble sold shares worth $946,374 and Joseph Loughran, president of U.S. information solutions, exercised options to dispose of stock worth $584,099. Rodolfo Ploder, president of workforce solutions, sold $250,458 of stock on Aug. 2. None of the filings list the transactions as being part of 10b5-1 scheduled trading plans. This is roughly 13% of Gamble’s share, 9% of Loughran’s, and 4% of Ploder’s.
According to Equifax, intruders had access to names, social security numbers, birth dates, addresses and driver's-license numbers, as well as credit-card numbers for about 209,000 consumers. This marks one of the largest cybersecurity breaches in history. Whether it was sheer fortune or collusion of some sort, selling stock is working well for these three executives. Equifax shares tumbled 13 percent to $123.81 in early trading at 9:04 a.m. in New York.
“I don’t know how the board will allow these executives to continue in their positions,” said Bart Friedman, a senior counsel at Cahill Gordon & Reindel LLP, who advises boards on matters including corporate compliance and enforcement challenges. “Yes, they should have a careful investigation and have an independent law firm interview the executives and review their emails and determine what they knew and when, but the end result is likely clear.” Judy Burns, a spokeswoman for the Securities and Exchange Commission, declined to comment when asked by Bloomberg. More details are likely to come in the upcoming days, as more details of the breach itself and Equifax’s handling of it are revealed.