Business & Tech

Dozens of Senators seek probe of Equifax managers’ stock sales after cyberattack

A cyber breach at the credit-reporting agency may have led to the theft of 143 million Americans’ personal data.
Associated Press/File 2012
A cyber breach at the credit-reporting agency may have led to the theft of 143 million Americans’ personal data.

WASHINGTON — More than one-third of US senators want the Securities and Exchange Commission and Department of Justice to get to the bottom of whether Equifax Inc. managers violated insider trading laws when they sold stock days after the company found out it was hacked.

Thirty-six lawmakers, mostly Democrats but some Republicans, signed letters to the two agencies. The bipartisan request shows the degree of public outrage over a cyber breach that may have led to the theft of 143 million Americans’ personal data.

The stock sales in question involve chief financial officer John Gamble; president of US information solutions Joseph Loughran; and president of workforce solutions Rodolfo Ploder. They unloaded shares worth nearly $1.8 million days after the company discovered a security breach July 29. Equifax publicly disclosed the hack six weeks later, and says the managers didn’t know of the breach at the time they sold shares.

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“We request that you conduct a thorough examination of any unusual trading, including any atypical options trading, for violations of insider trading law,” the senators, led by Rhode Island Democrat Jack Reed and Louisiana Republican John Kennedy, wrote in the letter. “We request that you spare no effort in your investigations and in enforcing the law to the fullest extent against anyone who is found to be at fault.”

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SEC chairman Jay Clayton declined to comment on Equifax but said the SEC is working to increase public awareness of the “substantial systemic risks” associated with cybersecurity.

The Justice Department did not respond to an e-mail seeking comment.

Senator Mark Warner, a Virginia Democrat, separately asked the Federal Trade Commission to probe whether Equifax and its competitors have adequate cybersecurity safeguards to protect “the enormous amounts of sensitive data they collect and commercialize.” 

Information compromised in the Equifax hack includes Social Security numbers, driver’s license records, and birth dates. The company is among a handful that control data such as credit histories that banks rely on to issue loans.

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The FTC’s acting chairwoman, Maureen Ohlhausen, said her agency is looking closely at the Equifax matter, but stopped short of saying it has opened a formal probe.

At least six congressional committees are examining the breach, scrutinizing how it happened and why Equifax waited more than a month to disclose it. Lawmakers are also using the hack to push policy goals, such as calling for tougher rules on how companies handle consumer data and the removal of barriers consumers face in suing financial companies.

The Consumer Financial Protection Bureau, which has the authority to monitor credit-reporting companies and go after firms that fail to protect consumers, said it is also looking into the breach.