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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.
...right
Equifax finds Equifax not guilty.
Clears Execs (not like anyone expected anything different).
So these supposedly important members of the company weren't (officially) notified or found out about this July 29th hack till August 10th?
I assume they were notified of the previous March hack, and how it had yet to be disclosed?
The internal investigation by Equifax cleared the Equifax executives of any wrongdoing when they sold their stock in Equifax just before the story about how Equifax was so sloppy with the personal data of millions of people who aren't even customers of Equifax that hackers were able to get all of it.
Well, I guess that settles it. Surely, if there was wrongdoing, the internal investigation by Equifax would have found it and brought the wrongdoers to justice.
Now watch me hit this drive...See that? Right in the middle of the fairway.
You are welcome on my lawn.
"We have investigated ourselves and have found no evidence of any wrongdoing."
These investigators were hired by the same board that hired a team of executives who had no clue about computer security and apparently had no idea that one of the largest failures of computer security ever had occurred several days earlier. With that sort of hiring record, I'm not sure I'd trust anyone they hired.
"Internal investigation" by "board-appointed special committee" (how do I fit more quotes around that?).
I, for one, am shocked they they found no wrong doing!
It's not as if any crimes were committed. Oh, wait...
/. Dissent will not be tolerated. Think like us or perish.
I didn't know fox was into that.
Any time someone says the free market can police itself, refer them to situations like this.
So they "reviewed" 55,000 documents. At just one minute per document, that works out to about 920 man hours of work just to look at them all, much less to understand them.
And yeah, I'm going to trust the "internal review" of a company that has already proved it has a corporate culture as trustworthy and reliable as Kevin Spacey in a roomful of naked teenage boys.
I've calculated my velocity with such exquisite precision that I have no idea where I am.
big companies that reward their executives with stock, or large numbers of options, usually put restrictions on the sale as part of the contract. For example, the most common contract is that they can sell their stock, but only on a 6-month schedule. So they had to have it scheduled for sale at least 6 months ahead of time. I have no knowledge of Equifax in particular, but this is SOP. It would raise a shit ton of eyebrows if not. And, if it's only just a little over a million bucks, that sounds to me like they had it scheduled. Because, if they were playing the inside they'd have made a shit-ton more than that between them.
Speak for yourself.
Nice try Equifax, but I will wait for the findings and recommendations of the federal investigators, not some stooges you hired to put out what amounts to a PR statement.
If you disagree, please post your argument. (-1, Overrated) isn't your personal censorship tool for views you don't like
How about if you are an executive, then for every quarter you Pre-Enter a Sell Order assuming something bad will happen.... If you don't learn of anything catastrophic happening, then cancel or modify your sell order before it occurs and/or before it has to be reported.
Any investigation will basically always show you knew nothing about what the bad thing was at the time you created the order ----- Because it's what you knew when you failed to cancel your order as otherwise intended that matters.
I doubt that anything will come of that either. Is anyone from the 2008 financial collapse in jail? No, of course not. There is a different standard of justice for the 1%, because they control everything.
Even if they weren't sent an email, its hard to imagine they didn't hear something at the water cooler.
Does this come as a surprise?
never email or text anyone about insider trading, got it.
It is amazing how many people don't get it. I have read many email discussions where people openly discuss tax evasion strategies, stealing office supplies, driving stoned, etc. Never, ever, say anything in writing that you can't explain to a judge and jury.
There have been dozens of Republican investigations into Hillary Clinton, by every far-right congressional jack-off you can think of. They've all come up with nothing
Robert Mueller is a Republican. He's also a highly decorated war hero. His military decorations and awards include: the Bronze Star Medal with Combat "V", Purple Heart Medal, two Navy and Marine Corps Commendation Medals with Combat "V", Combat Action Ribbon, National Defense Service Medal, Vietnam Service Medal with three 316" bronze stars, Republic of Vietnam Gallantry Cross, Republic of Vietnam Campaign Medal, and Parachutist Badge.
He served as FBI director under both Republican and Democratic administrations. And now, as Special Prosecutor, he's already taking Trump administration scalps. Number of arrests of Obama Administration officials over eight years? Zero. Number of Trump administration officials arrested or had to resign in disgrace just in the first 10 months of his presidency? I count an even dozen, including Trump's choice for chief scientist at the USDA, Sam Clovis.
So take that beam and stick it straight up your alt-right ass.
You are welcome on my lawn.
So the Equifax board, composed of people who play golf with and has hired these execs, has cleared the execs of wrongdoing? What a fucking surprise.
In a better world, both the execs, the board, and the committee they appointed, would be chilling in the slammer right now.
"The agriculture ministry is not in charge of Gundam" - Japanese ministry official.
Well, the results of that may still be funny, at least.
Most ACs are not even worth the keystrokes to insult them. Be generically insulted by this and ignored otherwise.
That's my take on it. I'd be willing to accept that they didn't know specifically about the breach. However they probably had heard that something had happened which would negatively affect share prices.
I have so little confidence in Trump's abilities that I reckon he'd end up being found guilty by his own investigation.
Okay, to be fair, let's count the Obama administration officials who had to resign in disgrace Van Jones is one, pretty minor (as opposed to, say, Tom Price, who was a cabinet secretary), and it's arguable if it's in "disgrace" although he was forced out because of controversy, true enough. Any others?
Culture? He was talking about Atlanta!
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
Last time I checked a company cannot clear someone of criminal wrong doing. These execs need to be looked at by the Justice department.
Nice try Equifax.
Watercoolers are for the interested or those managers that feign interest by talking down the line. This is Equifax we're talking about. I have no doubt that these people have an ivory tower built withing a cone of silence.
People get put in jail for insider trading all the time. The problem is what looks like insider trading often isn't more than pure co-incidence. E.g. they sold stocks the day before the announcement? Have you tried selling company stock options before? With the restrictions in place they likely had been working on this sale for months, or it was scheduled as part of the standard remuneration vesting.
It needs to stop.
About 8 years ago, I read a book called "The Battle for the Soul of Capitalism", by John Bogle, founder of Vanguard. In one of his chapters, he makes a case for ending executive stock-option compensation. The original intentions of stock-option compensation were to provide executives an incentive to perform well; as Bogle puts it, "align management's interests with those of shareholders".
But Bogle went on to explain a key difference between executives and shareholders. Executive interests are short-term, while shareholders are invested long-term. Most individuals still invest long-term, and a substantial percentage of the stock market is locked away in retirement 401k's / 403b's, or in pension account investments. That money's not going anywhere anytime soon. But executives want their salaries as big as possible, as soon as possible. So, rather than executives making business decisions with long-term interests in mind, they selfishly make business decisions that maximize short-term values with little interest in how those decisions will affect the value of the company beyond the sell date of their stock compensation, 401k's be damned.
And that's why we need to end stock-option compensation.
Now that would be an event to remember for a long time!
Of course, the actual problem is not Trump. He is just a symptom of the morons taking over.
Most ACs are not even worth the keystrokes to insult them. Be generically insulted by this and ignored otherwise.
As I said at the time, the amounts of stock the three execs sold in this particular date range were small percentages of their overall holdings and less than amounts they sold earlier in the year (and, I suspect if someone were to take the time to look, the prior year as well, etc.) If they really were trying to liquidate their holdings in response to bad news, they did a pretty poor job of it.
And look at it this way: if they really did know about the breach, they would have well understood that selling into that bad news would have triggered exactly the reaction it did, creating a huge amount of both civil and criminal risk in exchange for what was for them a fairly small amount of money.
I know conspiracy theories are fun, but I'm holding out hope for a thoughtful response this time.
... and found we have done nothing wrong.
Your sig here!
Oh phew at least they acted legally says their own internal investigation.
I burnt the house down then tried to incriminate the neighbour but hey my own investigation team says i am not guilty of the latter. Lets try and forget the house burning incident too ;-)
Poor Americans, this is like most of you are enrolled in an anti-lottery. That means if you win some criminal chose your identity to conduct fraud.
If USA had a real government department to enforce this stuff they would have shut down equifax immediately. In the same way as banks work: banks don't/cant go broke but if run badly at solvency risk the auditors come in and take over the administration of the bank. Equifax just uses this whole turbid event to try and sell dodgy insurance products against a breach they created. Ultimate white collar criminals.
Have gnu, will travel.
The government needs to not be in how people buy/sell stock in any way, shape, or form. You can see the poisonous taint of socialism, pure and simple. Thankfully, the wise men of Congress are removing this from our government slowly, but surely, be it far better tax laws in front of Congress, to letting the engines of economic growth do what they do best without the burden of excessive taxation.
If they have stock, it is their right to sell it at any time. If the security breach was known about privately, that doesn't change anything, and it is their right (like a salary perk) to dump stock and short it before the breach comes out, due to the company positions they hold. Don't like it, feel free to move to a socialist nation that likely will collapse, while the US rides the highest stock figures in history, showing the current libertarian values in place, are what a country needs.
Load of crap?
I have a fine vacation property west of Miami that you'll love. And I'm willing to part with it for a price that's practically a steal. In fact, I'll handle all of the work for you. Just post your checking account and routing transit numbers here and I'll handle the money transfer myself. I'll also need your DOB and SSN to properly change ownership of the property, and your home address so I can mail the deed to you. Don't miss this opportunity! You'll love it! Be the envy of your friends and family with a vacay home that's practically oceanfront.
You can trust me. I say I'm honest and truthful, therefore, I'm honest and truthful, ipso facto, nolo contendere, de facto, ex facie, cosa nostra, jus primae noctis, in extremis, ustre eme, expressio unius est exclusio alterius.
Imagine all the people...
"The report, prepared by a board-appointed special committee"
That whole asking the " fox to guard the hen house " thing comes to mind.
No wrong doing found here. No sir. Nothing to see, move along.
An investigation performed by a skulk of foxes into the mysterious deaths of five chickens in a nearby coop revealed no obvious cause and that reports of chicken feathers found in piles of fox poop near the scene were fake news.
It must have been something you assimilated. . . .
EQUIFAX: We have investigated ourselves, and found that we have done nothing wrong.
SEC: Cool. As you were.
Further let us also investigate why the top officials were not informed of important security issues. Also let us investigate the board for paying such salaries and compensation with no requirement to know, with no real responsibility.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
You must not know many foxes.
Glad that's all cleared up then.
I do not want your cheap brainburning drugs. They are useless for work. And I am a working man today.
That and an 11 day timeline? You've never sat on bad news before bringing it to your boss, ever. Particularly news so bad you're probably going to get fired? Right.
Well, this shouldn't have to be said, but just because you're incompetent as fuck doesn't mean everyone is incompetent as fuck.
The answer is no, I've never had to tell any boss something so bad I'd be fired, because I generally know what I'm fucking doing. These wankers knew what they were doing when they sold stock, and they did not know what they were doing when setting up a secure environment.
I do not want your cheap brainburning drugs. They are useless for work. And I am a working man today.