WASHINGTON, DC – Today, U.S. Senators Jack Reed (D-RI) and John Kennedy (R-LA) issued the following statement after the U.S. Securities & Exchange Commission (SEC) charged a former Equifax executive with committing securities fraud by engaging in insider trading and dumping his stock before the credit reporting agency went public with a massive data breach:

“We commend the SEC, with assistance from the Department of Justice and the Federal Bureau of Investigation, for taking appropriate action to pursue justice and ensure meaningful accountability from Equifax executives. 

“The SEC must follow the facts wherever they lead to prevent Equifax insiders from benefiting at the expense of average investors.

“This complaint highlights that at least one Equifax employee was putting personal interests and financial gain above the interests of their customers.”

On September 12, 2017, Reed and Kennedy led a bipartisan group of 37 U.S. Senators in asking the SEC and the U.S. Department of Justice (DOJ), and the Federal Trade Commission (FTC) to investigate the sale of nearly $2 million in Equifax securities held by high-level Equifax executives shortly after the company learned of a massive cybersecurity breach.

Equifax, a major consumer credit reporting agency, disclosed that unauthorized parties had obtained sensitive information - such as Social Security numbers, addresses, and driver’s license numbers - for as many as 148 million people.  The breach is believed to have occurred in May and was discovered internally by Equifax in late July.  Within days of Equifax’s internal discovery of the breach, three top level Equifax executives - the Chief Financial Officer; the President of U.S. Information Solutions; and the President of Workforce Solutions - sold large amounts of their shares of Equifax stock, though its customers and the public were not notified until September 7.

Equifax stated at the time that the three executives were not notified of the breach when they sold shares and exercised options.  And Equifax’s board convened a special committee, which declared in November that the executives’ transactions complied with company policy.

In their letter, the Senators expressed concern about potential insider trading violations: “As part of your investigations, we request that you conduct a thorough examination of any unusual trading, including any atypical options trading, for violations of insider trading law.  To the extent that your investigations uncover any information regarding whether Equifax management employed reasonable measures to ensure the security of the now compromised data prior to this cyber breach, we would appreciate your sharing these details.”

The 37 Senators also wrote: “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.”