The U.S. Justice Department has reportedly opened a criminal investigation into the sale of Equifax stock by high-ranking executives just days before the company revealed they had been the subject of a massive data breach.
Bloomberg reports that the U.S. Justice Department has begun an investigation into whether or not top Equifax officials broke insider trading laws by selling Equifax stock before the company revealed that they had fallen victim to a large-scale cyberattack that left the personal information of 143 million people vulnerable.
U.S. prosecutors in Atlanta are reportedly investigating the sale of the stock and Equifax’s breach of security in conjunction with the FBI. The Securities and Exchange Commission is also reportedly working with prosecutors on the investigation to look into the stock sales.
The officials reportedly being looked into are John Gamble, Equifax’s president of U.S. information solutions, Joseph Loughran, and Rodolfo Ploder, the company’s president of workforce solutions, according to two people familiar with the investigation.
Equifax said it became aware of a security intrusion on July 29, and executives in the company sold approximately $1.8 million worth of stock in early August. Equifax claims the executives did not know about the data breach when they sold their shares.
The investigation will reportedly be handled by the U.S. attorney’s office in Atlanta where Equifax’s HQ is located. A spokesperson for the attorney’s office declined to comment on the investigation to Bloomberg but did confirm that an inquiry was being performed. U.S. Attorney John Horn said in a statement, “The U.S. Attorney’s Office for the Northern District of Georgia is working with the FBI to conduct a criminal investigation into the Equifax breach and resulting theft of personal information.”
The SEC is reportedly investigating what information the executives were in possession of and when they were made aware of the data breach according to a person familiar with the matter. Over one-third of U.S. Senators have called on the Securities and Exchange Commission, in addition to the Justice Department, to discover whether or not the Equifax executives violated insider trading laws in selling their stock before the announcement of the hack.
In a separate investigation, state and federal regulators and law enforcers are investigating the data breach that Equifax suffered and attempting to determine who was behind the attack. The U.S. Federal Trade Commission and a Congressional committee with subpoena power recently joined the growing number of government bodies investigating the cyberattack.