Former Equifax CIO sentenced for insider trading
justice.gov
justice.gov
This is the most embarrassing part. CIO’s gotta know better.
Am I reading this right?
Keep doing what you're doing, Ying.
Many rational people would do what this CIO did given this minor fine and brief prison sentence.
I am not sure at what point I would start to consider 4 months in jail for insider trading “worth it” (again this was a plea deal, could’ve been higher).
If all your personal wealth is tied up in a single company’s stock then you obviously run a risk of losing it all. The solution to that is diversifying your portfolio, not insider trading.
He made a very stupid decision and it will impact the remainder of his life.
What's the impact of this conviction in his future earnings?
A rank-and-file engineer at Google already earns $200k to $500k.
This is a C-level at a large company. I'd say $500K isn't much.
Very dumb decision by CIO, to be honest.
It's not like C level people are some blue blood creature that feels the consequences of a criminal record differently than the rest of us.
The $1M from this sale alone is about what many people would earn in an entire lifetime.
You must not know many C levels... The majority of those in my sphere are loaded down with jumbo mortgages, private school and college obligations. And they're not all making multiple millions per year.
The average CIO at a fortune 500 (which is what we're talking about) gets $1.4MM according to https://blogs.wsj.com/cio/2016/09/12/small-data-what-fortune...
So yes, not multiple millions but it's quite a difference from the average startup CIO.
So he had to pay back what he avoided losing plus $55k, plus serve time. I think the monetary fine is pretty low, but the gov't is not stupid - they made sure he came out negative.
Although those examples are often less about stupidity and more about not wanting to actually punish.
He also lost his job, has a felony conviction that will harm his ability to find another one and likely paid a fuckton in lawyers fees that exceeded any gain he made.
Not saying this was a fair sentence - I think it was lenient - but the top of the line number isn't the whole punishment.
Harm is too soft a word. It’s down right impossible to get a job in a regulated industry with a felony conviction.
(not that the crimes you mentioned necessarily hurt anyone either)
Drug offenders often get punished so disproportionately for their crime that they're unable to take advantage of systems that would help them improve their lives after their multi-year prison sentences (jobs, college, travel, etc.) They certainly aren't going to have a few hundred thousand dollars waiting for them when they got out.
This is clearly anecdotal, but a family member of mine - who was imprisoned for 4 years in work camps over a drug offense - was given $35 and a "good luck".
Edit: By the way, his career was ruined the moment he became accountable for one of the worst data breaches in history - this conviction isn't what ruined his career as a CIO.
I still don't think 4 months for insider trading is inappropriate, in most of the EU you'd probably not go to prison at all.
Sentences for drug offenses are insane, that doesn't mean sentences for victimless insider trading should be too. Why make things worse when you could make them better?
What exactly is your point?
That you have consequences to crime outside the judicial system... again, is something everyone has.
It applies the same to the guy selling a little weed on the side who loses his day job when he gets busted as it does to the CIO who does a little insider trading on the side and loses his day job when busted. Everyone loses their job when busted. Especially when the crime is related to betraying the hand that feeds you.
There's absolutely zero reason to bring up the loss of job as punishment, unless you are trying to subtly defend the sentencing without actually having to take up that position explicitly with clear arguments.
He's going to be just fine, and there isn't any way you could frame his situation to be worse than what drug offenders are put through.
Makes sense. I’m totally in agreement here.
By trading on insider information, he saved himself $117k in future losses (though not really because over time, I'm sure the stock will fully recover if it hasn't already). Thus the fine of $117k claws back everything that he gained due to his insider trading.
Plus, an additional $55k in fines. Plus who knows how much in lawyer fees. And then of course a criminal record that won't help with future employment prospects.
However, the pedantry I made myself vulnerable to doesn't really change my point that he's getting a disproportionately easier sentence than a drug offender would get.
Sure, we know that NOW, but at the time he could have lost enormously more. If he KNEW that was going to be his total loss it's quite possible he never would have risked it.
Sentencing for drug related offenses is fucked, everyone knows this.
Go over $500 and get charged with grand larceny and see what happens
As Nancy Botwin said on Weeds “maybe your people need to steal bigger”
Since it wont be called stealing if its big enough
But I don't disagree that lots of other crimes are way overcharged.
You'll even find a large number of comments here defending the sentencing saying 'but he will lose his job'. As if that doesn't happen to everyone else convicted of crime.
It does not, in fact, happen to everyone else convicted of a crime.
Serious question. I might be missing something, though I will be honest and say I doubt it.
The statement upthread did not end “anyone convicted of a crime involving betrayal of the trust of their employer.”
(I'd also question whether insider trading of the type here really fits that description, as the employing corporation is not really the victim.)
I could have made my sentence more clear by adding 'such a crime' instead of a crime. But given that these are comment on the article, it would be implicit to most who aren't trying to split hairs.
At the lower standard of just a crime, I still can't think of a job you'd keep when going to jail. Maybe organized crime, but that isn't a W2 job.
I'm truly trying to think of an actual job (as in W2) example for your statement, I'd be interested to know if there is one.
P.S. I never argued about victim hood. He betrayed his employers by getting confidential information that his employers legally expected he wouldn't use to his own benefit and he did. (if you click the link, this is clearly stated)
It's a matter of trust. Trust is directly related to honesty and responsibility: saying something that matches reality and being accountable. As in: people who say things and then can provide examples or admit wrong. Having your words, actions and objective reality match up is important to some of us, we value honesty.
I worked for him when this happened - he was a smart guy who happened to guess right. He hadn’t been informed of the breach when he traded his options, he just make an educated guess based upon things happening. I don’t think it was right, but it definitely wasn’t malicious. The company could have closed the trading window which would have prevented it.
The worst thing for him is that he would have been made the global CIO if he hadn’t cashed in his options. The money in this transaction is peanuts compared to what he lost there.
Edited: app was NOT in his dept
> On Friday, August 25, 2017, Ying texted a co-worker that the breach they were working on “sounds bad. We may be the one breached.” The following Monday, Ying conducted web searches on the impact of Experian's 2015 data breach on its stock price. Later that morning, Ying exercised all of his stock options[.]
Reward: $1,000,000~ Profit
Potential Cost When Caught: Restitution $117,117.61 + $55,000 Fine + 4 Months Jail Time
Odds of Getting Caught: ?
I feel the ? part is probably pretty low. Like single digit low.
Seems like pretty bad disincentive. Especially when compared to how we disincentive petty things like shop lifting. How much more egregious will our legal system get?
He WOULD have lost $117k. So after all the chips fell, that was his ill-gotten amount.
But he didn't know that at the time. He knew the stocks were going down. How much is anyone's guess. The externalizations of their failure are a multi billion dollar matter. It wasn't a small issue. There was a real potential their stock would plummet.
From his perspective at the time, he was getting almost $1m, which he might not get otherwise.
Furthermore, the reason for the stock going down in the first place was HIS fault. He was the CIO. The information leak was directly on his shoulders.