Equifax Defends Legality of Executive Stock Sales

This summer’s hack of Equifax’s customer data has left nearly 150 million Americans in question of whether or not their data was included in the breach. The attack, which began in May and wasn’t caught until July, was further punctuated by a malware incident involving the company’s website in the following October, resulting in the suspension of a deal with the IRS. While the company will inevitably face legal repercussions, whether in the form of Justice Department action or through suits from individual customers, a recent internal inquiry has allegedly cleared members of the company from wrongdoing in at least one aspect of the case.

 

In the immediate days following the Equifax breach, it was reported that a group of several key executives sold off a large quantity of shares. With a value approaching $2 million, the sale of these shares was immediately the target of a probe led by the the Securities and Exchange Commission and Georgia’s U.S. Attorney’s Office. Equifax first became aware of the hack on July 29th, with the four executives in question jettisoning their stocks the following first week of August.

 

Given the timeline, it seemed more than likely that the sellers had been made aware of the hack, thereby making this an example of insider trading. However, Equifax maintained that Douglas Brandberg, an investor relations lead, Joseph Loughran, president of information solutions, John Gamble, the CFO, and Rodolfo Ploder, the president in charge of workforce solutions, were not among whose who had knowledge of the attack before its public announcement.

 

Equifax led its own internal investigation, which this week revealed its determination that the trade did not break any legal bounds. The investigative teamed performed well over 30 interviews and sifted through roughly 55,000 emails but found no evidence that the four executives in question had advanced knowledge, and likewise determined that the sales were approved following the necessary legal procedures. That said, it’s unclear if or how this internal investigation will affect legal proceedings from U.S. officials.