one of the largest attacks on corporate data in history. It turns out that three executives sold a total of nearly $1.8 million worth of company stock just days after Equifax discovered the data breach.
The credit-reporting service said earlier in a statement that it discovered the intrusion on July 29. Regulatory filings show that on Aug. 1, Chief Financial Officer John Gamble sold shares worth $946,374 and Joseph Loughran, president of U.S. information solutions, exercised options to dispose of stock worth $584,099. Rodolfo Ploder, president of workforce solutions, sold $250,458 of stock on Aug. 2. None of the filings lists the transactions as being part of 10b5-1 scheduled trading plans.
A company spokesperson referred to the sale as a “small percentage” of the executives’ shares and claimed that the three had no knowledge of the compromised data when they made the transactions.
Right now, we have to take the company’s word that the executives had no knowledge of the breach when they unloaded their stocks, but I can’t help but wonder whether they had caught wind that something was going on. It stands to reason that they would know the toll something like a data breach would take on Equifax’s stock price – it certainly has taken a hit already – and the timing of the sale is uncanny.
No doubt an investigation will follow, and some experts believe that heads could roll as a result.
“I don’t know how the board will allow these executives to continue in their positions,” said Bart Friedman, a senior counsel at Cahill Gordon & Reindel LLP, who advises boards on matters including corporate compliance and enforcement challenges. “Yes, they should have a careful investigation and have an independent law firm interview the executives and review their emails and determine what they knew and when, but the end result is likely clear.”
It’ll be interesting to see what happens if and when investigators get to the bottom of the whole situation.