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SEC: Equifax exec sold $1M of shares ahead of data breach announcement

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SEC: Equifax exec sold $1M of shares ahead of data breach announcement

The Securities and Exchange Commission charged a former chief information officer of a U.S. business unit of Equifax Inc. with insider trading.

The SEC alleged Jun Ying, who was next in line to be the company's global chief information officer, knew about the company's massive data breach, exercised all of his vested Equifax stock options and sold the shares for nearly $1 million before the breach was made public, avoiding more than $117,000 in losses.

The breach exposed the social security numbers and other personal information of about 148 million U.S. customers. Following news of the hack in early September 2017, Equifax's share price plummeted.

The morning of Aug. 28, 2017, Ying searched the internet for news of how the stock of Experian PLC reacted in 2015, when it disclosed a similar, but much smaller, security breach. "Within an hour" of running that search, Ying had accessed his Equifax stock plan account, exercised all his stock options and sold them, according to the SEC's complaint.

After Ying was added to a team of staff tasked with handling the breach on Aug. 30, 2017, a company attorney told him that no Equifax employees should trade company securities in order to avoid trading based on confidential information, the SEC wrote. Ying did not mention that two days earlier, he had sold all his vested options.

The U.S. Attorney's Office for the Northern District of Georgia has also announced parallel criminal charges against Ying.

The SEC's complaint charges Ying with violating the anti-fraud provisions of federal securities law and seeks disgorgement of ill-gotten gains plus interest, penalties and injunctive relief.