A former Equifax manager was charged with insider trading by the SEC. The ex-manager was accused of engaging in insider trading before the company announced a major data breach last year. Accordingly, this was the second case that SEC filed against the aftermath of the breach.
Sudhakar Reddy Bonthu, former manager, was trading confidential information while making a website for the company’s investors impacted by the data breach. SEC reported that Bonthu was trading on the non-public information by purchasing Equifax put options. After the announcement of the breach Bonthu sold the put options for more than $75,000 and returned more 3,500 percent of his investment.
Bonthu refuses to cooperate in this investigation and was later on fired from Equifax.
Richard R Best, Regional Director of SEC in Atlanta said, “As we allege, Bonthu, who was entrusted with confidential information by his employer, misused that information to conclude that his company had suffered a massive data breach and then sought to illegally profit,” he added, “Corporate insiders simply cannot abuse their access to sensitive information and illegally enrich themselves.”
A criminal charge against Bonthu was also made. To settle the civil charges, he agreed to return all the money he made from illegal transactions including penalties and interests. The settlement is still subject to court’s approval.
As of the moment, Equifax have spent a lot on related data breach. The company said that it already spent $68.7 million on the first quarter on breach related cases. So far, the company spent $242.7 million for breach cost only.