Slashdot Mirror
Equifax Investigation Clears Execs Who Dumped Stock Before Hack Announcement (gizmodo.com)
An anonymous reader quotes a report from Gizmodo: Equifax discovered on July 29th that it had been hacked, losing the Social Security numbers and other personal information of 143 million Americans -- and then just a few days later, several of its executives sold stock worth a total of nearly $1.8 million. When the hack was publicly announced in September, Equifax's stock promptly tanked, which made the trades look very, very sketchy. At the time, Equifax claimed that its executives had no idea about the massive data breach when they sold their stock. Today, the credit reporting company released further details about its internal investigation that cleared all four executives of any wrongdoing.
The report, prepared by a board-appointed special committee, concludes that "none of the four executives had knowledge of the incident when their trades were made, that preclearance for the four trades was appropriately obtained, that each of the four trades at issue comported with Company policy, and that none of the four executives engaged in insider trading." The committee says it reviewed 55,000 documents to reach its conclusions, including emails and text messages, and conducted 62 in-person interviews. "The review was designed to pinpoint the date on which each of the four senior officers first learned of the security investigation that uncovered the breach and to determine whether any of those officers was informed of or otherwise learned of the security investigation before his trades were executed," the report states.
The report, prepared by a board-appointed special committee, concludes that "none of the four executives had knowledge of the incident when their trades were made, that preclearance for the four trades was appropriately obtained, that each of the four trades at issue comported with Company policy, and that none of the four executives engaged in insider trading." The committee says it reviewed 55,000 documents to reach its conclusions, including emails and text messages, and conducted 62 in-person interviews. "The review was designed to pinpoint the date on which each of the four senior officers first learned of the security investigation that uncovered the breach and to determine whether any of those officers was informed of or otherwise learned of the security investigation before his trades were executed," the report states.
At least one requested approval a day before the hack. Those ones should be cleared immediately for obvious reasons.
Equifax only allows executives to sell shares during certain windows. The window in question started 7/28. The hack was found 7/29. This is adequate to explain the rush of sales by executives.
The sales were all less than 10% of what these guys held (VP of investor relations percentage is not specified).
It's not impossible that this was shady, but it's also plausible that it was not.
https://investor.equifax.com/news-and-events/news/2017/11-03-2017-124511096
The rules have not changed, but they are complicated. Sales of restricted stock must be pre-announced. Sales of unrestricted stock only have to be announced after the sale.
There are proposals to require pre-announcements of all sales by people presumed to have insider info.
I have so little confidence in Trump's abilities that I reckon he'd end up being found guilty by his own investigation.