Equifax CIO Charged With Insider Trading, Sells Shares Day Before Disclosure

Former Equifax executive Jun Ying, former chief information officer of an Equifax division known as U.S. Information Solutions has been charged by the SEC with insider trading. He is accused of selling more than $950,000 in stock before the data breach was made public.

Former Equifax executive Jun Ying, former chief information officer of an Equifax division known as U.S. Information Solutions has been charged by the SEC with insider trading. He is accused of selling more than $950,000 in stock before the data breach was made public.

EFX Breach

The sales were performed before Equifax publically disclosed that the company had information on 148 million Americans stolen. Jun Yung exercised all of his vested Equifax stock options and then sold the shares. Yung faces charges from the SEC and criminal charges. The gap down would have saved Ying around $115,000.  Clearly a case of greed overcoming reason if correct.

“This defendant took advantage of his position as Equifax’s USIS Chief Information Officer and allegedly sold over $950,000 worth of stock to profit before the company announced a data breach that impacted over 145 million Americans. Our office takes the abuse of trust inherent in insider trading very seriously and will prosecute those who seek to profit in this manner. U.S. Attorney Pak said in the news release.

Douglas Koff and Craig Warkol, two attorneys for Ying at Schulte Roth & Zabel, declined to comment.

In a statement, Equifax Interim CEO Paulino Do Rego Barros, Jr., said  “Upon learning about Mr. Ying’s August sale of Equifax shares, we launched a review of his trading activity, concluded he violated our company’s trading policies, separated him from the company and reported our findings to government authorities.”

Equifax in the past said hackers gained access to their systems from May 13 to July 30 of last year.

It is alleged that Ying alleged texted a colleague on Aug. 25 about the breach saying “Sounds bad. We may be the one breached.” Days later, Pak’s office said Ying searched on the web about Experian’s 2015 data breach and its effect on the credit bureau’s stock price. The same day, prosecutors say Ying exercised his stock options for more than 6,800 shares, which he allegedly sold for proceeds of more than $950,000, and a profits of more than $480,000.

“We are fully cooperating with the DOJ and the SEC, and will continue to do so,” the Experian CEO’s statement said. “We take corporate governance and compliance very seriously, and will not tolerate violations of our policies.”

Not a good look ….

Source: News release from U.S. Attorney Byung “BJay” Pak’s office

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