Federal investigators are looking into the sale of company stock by a trio of Equifax executives, who cashed in on about $1.8 million in shares after a massive user data breach was discovered, but before it was disclosed to the public.
Citing people familiar with the investigation, Bloomberg reported on Monday that the U.S. Department of Justice is looking into the matter for potential criminal activity. Cooperating in the probe are U.S. prosecutors in Atlanta, the Federal Bureau of Investigation, and the Securities and Exchange Commission.
At issue is whether Equifax Chief Financial Officer John Gamble, President of U.S. Information Solutions Joseph Loughran, and President of Workforce Solutions Rodolfo Ploder broke the law when they sold nearly $1.8 million in stock in early August.
Those sales took place after the company discovered on July 29 that an unprecedented, massive data breach may have exposed personally identifiable information of some 143 million U.S. citizens — or nearly 60 percent of adults in America.
Equifax has said that the stocks sold by Gamble, Loughran and Ploder were done without knowledge of the breach. However, there were no regulatory filings for any pre-scheduled trades.
Investigators now seek to determine whether the Equifax executives knew of the data breach before they sold the stock. Doing so would qualify as insider trading, as the breach had not yet been made public. Equifax disclosed the incident publicly on Sept. 7.
Considering the massive scope of the leak, many people have opted to initiate a credit freeze with all three major credit reporting bureaus — Equifax, Experian, and TransUnion. Doing so limits access to a credit report, making it difficult for fraudsters to open a bank account or obtain a credit card with a stolen identity.
The risk of identity theft from the Equifax hack is potentially massive — among the 143 million exposed identities were Social Security numbers, driver’s license numbers, birth dates, addresses, and credit card numbers.
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