Wealthy executives sold off Equifax stock prior to data breach revelation

The breach is said to have affected tens of millions of Americans.

Equifax Inc is a consumer credit reporting agency. It gathers and maintains information on millions of credit holders worldwide. Equifax is listed on the NYSE and is based in Atlanta. (AP Photo/Mike Stewart)
Equifax Inc is a consumer credit reporting agency. It gathers and maintains information on millions of credit holders worldwide. Equifax is listed on the NYSE and is based in Atlanta. (AP Photo/Mike Stewart)

Credit monitoring firm Equifax was left reeling this week after news emerged that three senior executives had sold nearly $2 million in stock just days before the company discovered a cyberattack that had exposed the sensitive information of 143 million Americans.

Equifax reportedly discovered the data breach on July 29 and announced it on September 7. However on August 1 and 2, executives John Gamble, Joseph Loughran and Rodolfo Ploder earned a combined $1,780,000 by selling off stock, which the Securities Exchange Commission said was not pre-planned.

Chief Financial Officer John Gamble made $946,374; U.S. Information Solutions President Joseph Loughran made $584,099; and Consumer Information Solutions President Rodolfo Ploder earned $250,458, according to Bloomberg News, which first broke the story.

A spokeswoman for the company insisted that the executives who “sold a small percentage of their Equifax shares” had “no knowledge that an intrusion occurred” prior to the sales.

Virginia Senator Mark Warner, vice-chairman of the Senate Intelligence Committee, told the Guardian that the breach—which exposed the names, social security numbers, addresses and drivers license numbers of tens of millions of Americans—was “profoundly troubling”. Credit card numbers for roughly 209,000 customers were also stolen in the data breach. It’s been suggested that the Equifax hack is one of the largest social security number thefts in America’s history.

“It is no exaggeration to suggest that a breach such as this…represents a real threat to the economic security of Americans,” Warner said.

“This is clearly a disappointing event for our company, and one that strikes at the heart of who we are and what we do,” CEO Richard F. Smith added in a statement this week. “We pride ourselves on being a leader in managing and protecting data, and we are conducting a thorough review of our overall security operations.”

However despite Richard Smith’s remarks it’s clear that executives Gamble, Loughran and and Ploder indadvertantly profited from the data hack, since Equifax’s stock has plunged in the wake of the revelations. What’s more, Gamble has previously worked for another company which landed itself in hot water for making “materially false” claims about their finances.

According to salary.com, CFO John W. Gamble made just over two-and-a-half million dollars last year. His salary was $632,243 and he also received $758,692 in bonuses and $1,244,532 in stock options.

Before coming to work for Equifax in 2014, Gamble was the Chief Financial Officer for Lexmark International. In 2016, a class action lawsuit was filed against the company, alleging that Lexmark “made false and misleading statements and omissions” in 2014 and 2015 that cost shareholders 500 million dollars. Specifically, Lexmark was accused of making “materially false” claims about its financial statements. Gamble was not specifically named in the suit.

The FBI is investigating the hack at Equifax, and the company has created a website to see if any of their personal data has been compromised, as well as a free year-long credit protection service. Some experts fear that Equifax’s protection still falls short, because hackers will still be able to buy and sell information over the web for years to come.