The Securities and Exchange Commission (SEC) has charged a former Equifax executive with insider trading ahead of the company's disclosure of a massive data breach in Sept. 2017. Jun Ying, a former CIO within a US business unit of Equifax, was next in line to be its global CIO.
The SEC alleges Ying used confidential corporate information to determine Equifax had been breached. Before Equifax disclosed the incident, the SEC claims Ying exercised his vested Equifax stock options and sold his shares, collecting nearly $1 million. The SEC says by selling his shares ahead of the company's announcement, he avoided more than $117,000 in losses.
"Corporate insiders who learn inside information, including information about material cyber intrusions, cannot betray shareholders for their own financial benefit," says Richard Best, director of the SEC's Atlanta Regional Office, in a statement. The SEC is charging Ying with violating the antifraud provisions of the federal securities laws.
This news follows updated guidance published by the SEC in Feb. 2018, that calls for public companies to give investors more intel on cybersecurity incidents and risks in a more timely fashion. The commission also states corporate officers, directors, and other insiders are not allowed to trade shares if they have unpublicized knowledge of a corporate security incident.
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