A former executive at Atlanta-based Equifax has pleaded guilty to insider trading in the wake of the company’s massive data breach in 2017.
Jun Ying, 43, former chief information officer of an Equifax division known as U.S. Information Solutions, sold more than $950,000 in stock in the weeks after the company discovered the breach but before the incident was made public.
Ying entered the plea Thursday in U.S. District Court in Atlanta. He had previously pleaded not guilty.
“Insider trading is an abuse of trust and victimizes everyone who invests in the stock market,” said U.S. Attorney Byung J. “BJay” Pak, in a statement after the plea. “Our office will continue its work to keep the stock market fair for all investors.”
The breach occurred in the spring of 2017 but was not discovered until several months later. According to prosecutors, Ying had been warned by the company not to trade stock based on information that was not publicly available.
Ying’s stock sale came days before Equifax announced the breach in which hackers obtained access to the personal information of more than 145 million Americans.
The breach led to the ouster of former CEO Rick Smith and early retirement for several other top executives.
The breach led to outrage by many in Congress who grilled Smith on the company’s security failings and the response after the break was discovered. However, Congress has taken no action against the company for the breach or its handling.
After the company realized consumer data had been breached, there were several weeks of investigation before a public announcement.
According to Pak, Ying texted a colleague on Aug. 25, writing “Sounds bad. We may be the one breached.”
Days later, Ying searched on the web about Experian’s 2015 data breach and its effect on the credit bureau’s stock price, according to the indictment. The same day, prosecutors say Ying exercised his stock options for more than 6,800 shares.
Around that time, Equifax offered Ying the company’s top CIO job. That offer was rescinded after the company reviewed his stock trades. Ying resigned about a month after that.
Ying’s sale of stock brought him a profit of $480,000, according to Pak.
On Sept. 1, 2017, Equifax stock was trading at $141.59 a share. But several days later, the breach was revealed and the price of shares dropped dramatically. Since then, the shares recovered somewhat, then fell along with much of the market late last year.
On Thursday, Equifax stock closed at 108.71 a share.
Ying is the second Equifax employee to be found guilty of insider trading relating to the data breach. Last July, Sudhakar Reddy Bonthu, a former manager at Equifax, pleaded guilty to the charge, Pak said.
Sentencing for Ying, is scheduled for June 27.
