Equifax executives hit by insider trading allegations following data breach

Equifax has been hit by a data breach which affected 143 million customers, and could prompt an SEC investigation after executives sold $2m of shares before the attack went public

 
The sale of shares after the attack happened, but before it went public, has led to allegations of insider trading 
Author: Barclay Ballard
September 8, 2017

On Thursday September 7, credit monitoring firm Equifax revealed that information relating to 143 million customers may have been compromised by a cybersecurity breach. The hack exposed names, dates of birth, addresses and social security numbers, while 209,000 customers also had their credit card details accessed.

The US company confirmed that the attack took place between May and July this year, after cybercriminals exploited vulnerabilities in a website application. The breach was discovered on 29 July, but was not announced publicly until yesterday. In a statement, CEO Richard Smith described the breach as “a disappointing event for the company”.

In response to the breach, Equifax is offering every US customer a comprehensive package of identity protection and credit file monitoring for free

“I apologise to consumers and our business customers for the concern and frustration this causes,” he said. “We pride ourselves on being a leader in managing and protecting data, and we are conducting a thorough review of our overall security operations.”

In response to the breach, Equifax is offering every US customer a comprehensive package of identity protection and credit file monitoring for free, but that will provide little in the way of comfort for affected individuals. Although larger data breaches have occurred in recent history, including a 2014 hack that exposed the personal data of 500 million Yahoo users, few have involved such a broad spectrum of sensitive information.

In related news, three top executives at Equifax are facing accusations of insider trading following the data breach. The individuals concerned sold nearly $2m of company shares in the days that followed the breach’s discovery, but before the attack went public. They claim that they had “no knowledge” of the incident at the time of the sale.

For now though, the threat of investigation by the Securities and Exchange Commission is the least of Equifax’s concerns. Aside from damaging the economic security of millions of US customers, the company also saw its share price fall by 13 percent in the wake of the attack.