Long after Equifax was breached by hackers, but before they told anyone else about it, some of its top execs sold off millions of dollars in stock, getting out before the stock tanked which would be blatantly illegal if the execs in question knew that the company had been breached.
While there's been an exodus of top Equifax "talent" (two IT execs "retired", as did CEO Richard Smith, who collected $90M for his final year), one guy who's still occupying an office on executive row is the company's senior counsel, John Kelley.
Kelley seems like he'll be the lynchpin of the criminal proceedings for insider trading. He was personally responsible for approving any executive stock sales and signed off on the execs who cashed out after the breach, and he also ran the company's cybersecurity efforts (which were spectacularly bad), meaning he either knew about the breach — the most significant fact about the company's security! — or he was unimaginably bad at his job.
The WSJ reports that Equifax contends that the executives who sold the shares were unaware of the breach when they made that decision. Sources note that the three executives had not been involved in meetings about the breach.
However, the shares were sold Aug. 1 and Aug. 2, just days after the breach was uncovered by security staff on July 29.
It's unclear if Kelley was informed of the breach on that day. If he was aware of the issue and then approved the share sales that would be troublesome.
For this reason, Equifax's board has opened its own inquiry into Kelley's role and knowledge of the hack.
The Equifax Executive Who Oversaw Security Also Approved Last-Minute Stock Sales
[Ashlee Kieler/Consumerist]
