A former Equifax CIO who sold stock in the company weeks before a massive data breach was made public has been sentenced to four months in prison for insider trading.
During the summer of 2017, Equifax was the victim of a data breach, where hackers acquired names, Social Security numbers, birth dates, and addresses of over 145 million Americans.
A month before the attack was reported, Eqifax CIO Jun Ying texted a co-worker that the breach they were working on “sounds bad. We may be the one breached.”
In the days that followed, Ying conducted web searches on the impact of Experian's 2015 data breach on its stock price before exercising all of his stock options. He received proceeds of over $950,000, and realised a gain of over $480,000, thereby avoiding a loss of over $117,000 when the stock plummeted in the wake of the public declaration.
“Ying thought of his own financial gain before the millions of people exposed in this data breach even knew they were victims,” says US Attorney Byung Pak. “He abused the trust placed in him and the senior position he held to profit from inside information.”
Ying is the second Equifax executive to fall foul of insider trading rules. In July 2018, Sudhakar Reddy Bonthu, a former manager at Equifax, pleaded guilty to similar charges and received eight months of home confinement.
“If company insiders don’t follow the rules that govern all investors, they will face the consequences for their actions. Otherwise the public’s trust in the stock market will erode,” says Chris Hacker, special agent in charge of FBI Atlanta. “The FBI will do everything in its power to stop anyone who takes unfair advantage of their insider knowledge.”
Ying was sentenced to four months in prison to be followed by one year of supervised release, ordered to pay restitution in the amount of $117,117.61, and fined $55,000.