March 15 (UPI) — Federal prosecutors charged a former Equifax executive Wednesday of insider trading, alleging he unloaded stocks before the company announced it had been affected by a data breach.
Jun Ying, former chief information officer at Equifax, faces civil and criminal charges from the Securities and Exchange Commission and U.S. Attorney’s Office for the Northern District of Georgia for allegedly profiting from confidential information about the massive breach.
“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,” said Richard R. Best, director of the SEC’s Atlanta Regional Office.
On Sept. 7, Equifax revealed hackers gained access to its data and potentially the personal information of some 143 million U.S. consumers in the breach which took place from mid-May through July.
Ying, who was next in line to be the company’s global CIO, learned of the breach two weeks earlier on Aug. 25, according to the U.S. Department of Justice.
“Sounds bad. We may be the one breached,” he wrote in a text to a coworker that day.
The stock market had already closed when Ying learned of the breach, but the following Monday he searched online to determine a 2015 breach of one of the company’s competitors, Experian, affected its stock.
Ying exercised and sold all his Equifax stock options, which the SEC said were worth $950,000, an hour later and avoided $117,000 in losses.
The SEC’s complaint charges Ying with violating the antifraud provisions of the federal securities laws and seeks for him to repay the $480,000 in profits he made from the stock sales plus interest, penalties, and injunctive relief.
“Corporate insiders who learn inside information, including information about material cyber intrusions, cannot betray shareholders for their own financial benefit,” Best said.