In addition to the company’s stock price plummeting, a criminal investigation has been launched regarding potential violations made by Equifax officials selling its stock before disclosing the data breach.
It’s been a wild ride for Equifax (NYSE:EFX) ever since the company was slammed with a massive data breach on September 7, when private information such as addresses and social security numbers of nearly 143 million Americans was exposed.
Shares of Equifax, which is a credit data company, have plunged 34.5 percent since September 8–a $49.24 percent loss–to $93.75 as of 3:00 p.m. EST on Monday (September 18), but the company’s woes don’t stop there.
In the wake of Equifax’s data breach, Bloomberg reported on Monday that federal attorneys are looking into stock sales worth $1.8 million by three of the company’s executives, which goes back to early August and before disclosing the breach that occurred on July 29. That said, the managers allegedly weren’t aware of the breach when their shares were sold.
According to the publication, the prosecutors– based in Atlanta–are further investigating the breach of personal information in relation to Federal Bureau of Investigation. Similarly, the US Securities and Exchange Commission is working with attorneys to probe Equifax’s stock sales, particularly those of: CFO John Gamble, president of US information solutions, Joseph Loughran; and president of workforce solutions, Rodolfo Ploder.
“The U.S. Attorney’s Office for the Northern District of Georgia is working with the FBI to conduct a criminal investigation into the Equifax breach and resulting theft of personal information,”US Attorney John Horn said in a statement.
In that regard, late last week (September 15), Equifax released a statement, highlighting that the company “continues to work closely with the FBI in its investigation,” stating that the “unauthorized access” likely happened between mid-May and July of 2017 and that the company wasn’t aware of the breach until late July.
“This is clearly a disappointing event for our company, and one that strikes at the heart of who we are and what we do. I apologize to consumers and our business customers for the concern and frustration this causes,” Richard F. Smith, the company’s CEO said in the September 7 announcement.
On that note, following Equifax’s security breach, New York Gov. Andrew Cuomo is proposing that credit reporting agencies follow similar cybersecurity rules as banks and insurance companies in order to better protect customers.
As reported by CNET on Monday, additional regulations would require that such companies register with New York’s Department of Financial Services.
New York’s cybersecurity regulations were officially implemented in March of this year, CNET reported, and requires companies to protect consumer data and report hacks–attempted or otherwise–to state officials.
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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.