Equifax CIO Put ‘2 and 2 Together’ Then Sold Stock, SEC Says
bloomberg.com
bloomberg.com
While I'm not sympathetic to the U.S. CIO named in this article, I find it somewhat dubious that none of the above executives knew anything. In any event, I wouldn't take Equifax's word for it. The finance dudes get a clean bill of health, and the tech guy gets thrown to the feds. Again, not that Ying deserves my sympathy either, but...
Maybe the finance dudes are not so retarded to sell their stock immediately after one of the biggest data leaks in history with no ahead of time sell plan, and after googling what was the impact on the stock price of another data leak.
Pretty bad op-sec for a tech guy. Or maybe he's just financially clueless, and doesn't know the the reason this doesn't happen more often (executives selling after really bad news) is exactly because the SEC it's doing a good job policing it and finance guys know that you need a SEC-proof alibi for any sell.
The reason that many stocks drop sharply 5-10% after some company news releases after being relatively flat is exactly because executives are scared shit-less of selling or leaking the info before that news is public.
"Three Equifax Inc. senior executives -- Chief Financial Officer John Gamble, and unit presidents Joseph Loughran and Rodolfo Ploder -- sold shares worth almost $1.8 million in the days after the company discovered the breach."
In general, security does not seem to be his strong suit.
This is why most high level execs will put in place pre-arranged plans (10b5-1) for selling at different thresholds and time periods.
He and the stripper are now married and spend their time training dressage horses.
Galling as it may seem, the way to combat this is the same as with the Mafia: you have to go after the mid-level people who facilitate it. In this particular case, the CIO is going to have a particularly hard job denying that he knew something was up, even if he had tried to maintain a veneer of ignorance. The best he (and we) can hope for now is for him to cooperate, and help uncover any evidence there is showing the others did know.
Let's say, you are in charge of security. The CEO is never interested in your work. One day, you got an invitation to meet with the CEO. You sold all your stock before you go to the meeting (based on a guess that something bad might have happened). Is that illegal? Is the meeting invite considered material non public information?
Generally though, the rules don't disallow average employees from guessing about the future stock price. It becomes illegal insider trading if somehow you had obtained material non-public information to make the decision.
However, if you're the Equifax CSO and the CEO is never interested in your work, you might want to sell your shares as soon as they vest anyway.
When there's insider trading happening, it's almost always a C-Level person or someone closely connected to him.
He was trying to sell his stock and didn't wait an official trail of him knowing about it. It would be hard to deny knowing about it once he joined the conference call. Did I read that right? Because that's what it sounds like to me.
> “VERY large breach opportunity”
"opportunity" what does that even mean? Were they celebrating and planning on monetizing it? That kind of makes sense I guess. Since they get to charge people to freeze their credit, their stock has recovered and executive retired happily to Bahamas or wherever. It was an opportunity after all!
Project Sparta [breach tooling team] was kept separate from Project Sierra [breach action team] to limit the number of people who knew that Equifax itself had been breached. Those Equifax employees who were only part of Project Sparta were not told that Equifax had been breached, but were instead told that they were working for an unnamed client that had experienced a large data breach [...]
https://www.sec.gov/litigation/complaints/2018/comp-pr2018-4...
1) CIO should probably know the answer w/o searching. 2) CIO should probably know how to search w/o leaving evidence trail (incognito mode in a coffee shop on personal laptop for starters).
If you have material information about a company that others don't, you're more than welcome to trade based on it. The profit incentivizes accurately pricing securities. If you know that some other company is concealing massive fraud, feel free to short the daylights out of it and write an exposé.
My bullshit detector is going off the charts.