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SEC Charges Former Equifax CIO with Insider Trading Related to Massive Data Breach

SEC Charges Former Equifax CIO with Insider Trading Related to Massive Data Breach

The Securities and Exchange Commission has charged Jun Ying, a former Chief Information Officer (CIO) of a business unit of Equifax, who was next in line to be the company’s global CIO, with insider trading related to the company’s September 2017 announcement about a massive data breach that exposed the private information of approximately 148 million Americans.

According to the SEC’s announcement and complaint, after he became aware that a massive breach had likely occurred, but before Equifax disclosed any news of such a breach to the public, Ying exercised all of his vested Equifax stock options and then sold the shares that he had purchased through the exercise, reaping proceeds of nearly $1 Million. The SEC alleges that by selling the shares based on the knowledge of confidential information entrusted to him by Equifax, rather than waiting to sell until the breach was disclosed to the public, Ying avoided more than $117,000 in losses.

“As alleged in our complaint, Ying used confidential information to conclude that his company had suffered a massive data breach, and he dumped his stock before the news went public,” said Richard R. Best, Director of the SEC’s Atlanta Regional Office.  “Corporate insiders who learn inside information, including information about material cyber intrusions, cannot betray shareholders for their own financial benefit.”

The SEC’s complaint charges Ying with violating the antifraud provisions of the federal securities laws, and seeks disgorgement of ill-gotten gains plus interest, penalties, and injunctive relief. In addition to the charges from the SEC, Ying also faces criminal charges from the U.S. Attorney’s Office for the Northern District of Georgia.

 

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