U.S. charges former Equifax manager with insider trading
A former Equifax Inc software development manager was charged on Thursday with insider trading before the credit reporting company disclosed a cyber attack that exposed the personal data of about 148 million people last year.
Federal prosecutors in Atlanta announced the charges against Sudhakar Reddy Bonthu, who was among the employees given the task of assisting in the company`s response to the breach.
It is the second time prosecutors have charged an Equifax employee with profiting by trading on confidential information related to the cyber attack before the company disclosed the data breach last September.
"Bonthu allegedly took advantage of his position to profit while members of the public were unaware of the data breach at Equifax," U.S. Attorney Byung Pak said in a statement.
Bonthu, 44, was arraigned in federal court in Atlanta on Thursday, prosecutors said.
Meg Strickler, Bonthu`s lawyer, said in a statement that her client was looking forward to moving his case through the criminal justice system.
Equifax fired Bonthu in March after he refused to cooperate with an internal investigation, according to the U.S. Securities and Exchange Commission, which filed a related civil case against him on Thursday.
"We are fully cooperating with the SEC and the Department of Justice, and will continue to do so," Equifax said in a statement. "We take corporate governance and compliance very seriously and will not tolerate violations of our policies."
From May 2017 to July 2017, hackers gained access to Equifax databases, allowing them to acquire the names, Social Security numbers, birthdates and addresses for millions of people, according to the government.
Atlanta-based Equifax began investigating the breach in July 2017 after discovering the suspicious activity, and by August had determined that consumers` data had likely been stolen, prosecutors alleged.
Bonthu knew by Aug. 30, 2017 that information from about 100 million individuals had been exposed and that the company planned to publicly disclose the breach in early September, the government said.
Using the information, Bonthu bought put options in Equifax stock using his wife`s brokerage account prior to the announcement, allowing him to profit if the company`s stock price dropped, according to prosecutors.
Equifax disclosed the breach on Sept. 7, 2017, after the market closed. Its stock price dropped the next day, and Bonthu made a profit of more than $75,000, according to charging documents.
In March, prosecutors filed insider trading charges against Jun Ying, a former Equifax technology executive. Ying has pleaded not guilty.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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