There’s a new twist in yesterday’s Equifax data breach story: according to reports, three of the company’s senior executives sold almost $1.8 million USD in stock just days after the hack was discovered. However Equifax claims the three were not aware of the breach at the time.
Share Price Falls After News Released
In its initial statement, Equifax said its staff became aware of the security breach on 29th July. The incident saw detailed personal records of 143 million American consumers exposed — including 209,000 credit card numbers and 182,000 other personally-identifying documents.
The public and media only became aware of the incident yesterday. Equifax, which tracks consumers’ detailed credit histories for third parties, saw its shares fell 13 percent by evening as the news spread.
Bloomberg reported that in the first days of August 2017, Equifax CFO John Gamble sold shares worth $946,374. Joseph Loughran, president of U.S. information solutions, sold stock options worth $584,099 and Rodolfo Ploder, president of workforce solutions, sold $250,458 of his stock. The transactions, made public under reporting requirements, were not part of scheduled trading plans.
Equifax: Execs Who Sold Stock Didn’t Know About Hack
Equifax told Bloomberg in an email that the managers “had no knowledge that an intrusion had occurred at the time.” However the timing is certainly raising eyebrows, and may prompt further scrutiny.
“I doubt this is the end of it,” said Bloomberg News’ Anders Melin. “This is material information that… one of the biggest hacks that took place ever, and that share sales happening so closely after — and before investors and the broader public knows about this happening. I’m sure it will be looked at at the company level, and perhaps also escalated to regulators.”
If the managers were indeed unaware of the situation, it raises further questions. Why was the CFO of a major company not notified of such a significant incident immediately? It’s reasonable to expect other senior managers would be notified within days, too.
With the personal records of almost half the U.S. population exposed, the incident is one of the biggest data security breaches ever. Equifax is also likely to face questions over why the information was so easily accessed over the Internet.
What do you think will happen next? Let’s hear your thoughts.
Images via Equifax, Pixabay