On Thursday evening, credit reporting agency Equifax announced a massive security breach. On Friday, new information revealed the company knew about the breach for six-weeks, and that three Equifax executives sold their company stock days after the hack was discovered.
Equifax says the executives in question were not aware of the cyber attack that compromised the data of approximately 143 million people between mid-May to July. The attack exposed Social Security numbers and other sensitive information for the affected group, as well as 209,000 credit card numbers of U.S. consumers.
The company says it detected the hack on July 29. Days later, on Aug. 1 – 2, Equifax Chief Financial Officer John Gamble, along with two other executives, Rodolfo Ploder and Joseph Loughran, sold their stock, for a combined total of $1.8 million.
A statement issued by the company claims the executives “had no knowledge that an intrusion had occurred at the time they sold their shares.” The timing seems overly fortuitous, however, as it allowed them to avoid a 13-percent downturn in Equifax stock, and a trading extension, following the announcement of the breach on Thursday.
According to the Securities and Exchange Commission, buying or selling shares based on information that is not available to the public is called insider trading. The behavior is a federal offense, and punishable by a maximum prison sentence of 20 years and $5 million fine.
Equifax, one of the three largest credit agencies in the United States, says it “acted immediately” upon learning of the cyber-security hack. The scope of the breach was massive: It will affect over one-third of the population in America (324 million as of Jan. 1, 2017, according to the U.S. Census Bureau).
Equifax said it would work with America, the UK, and Canada to determine appropriate next steps for affected customers, but so far, they have only detected a breach of U.S. consumers.
You can read more about the cyber attack HERE.
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