The Securities and Exchange Commission recently released a statement mentioning that a former CIO, Jun Ying, has been charged with charges related to insider trading, which he was previously acquitted of. According to the complaint that was made against him, Ying exercised the power to buy all his vested stock options in Equifax and then sold them to gain nearing 1 million dollars. This was done before the disclosure of the data breach in Equifax was made to the public.
The main reason behind the complaint was that Ying had gone on to sell the shares before the breach of data was announced to the public. By doing so Ying was able to safeguard his interest from the $117,000 loss that he would have otherwise gone through because of the news related to the data breach. Such actions from people at strategic positions within a firm are considered as fraud and come under the definition of illegal insider trading based on the guidelines that SEC has in place for cases.
Judgment
Since Ying has been charged for the cases that were made against him, the SEC is now free to give the desired punishment to him. It has been found out through reliable sources that the SEC has decided to punish Ying by having him pay back the sum that he had gained by selling the stock before the data disclosure. This is done by passing a judgment to limit him from holding the position of a director or an officer in any company that trades publicly and by imposing a fine through the civil monetary policy.
Future Warnings
After the data breach for Equifax, SEC has issued a warning for companies to follow during the investigation of security incidents. A document released by SEC, which is titled as Commission Statement and Guidance on Public Company Cybersecurity Disclosures, warns all officers, corporate insiders and directors from trading securities after they get to acquire knowledge related to a security incident or breach. This would stop the occurrence of claims regarding insider trading.
