The United States Department of Justice has announced that Jun Ying, the former Chief Information Officer (CIO) of Equifax U.S. Information Solutions, has been sentenced to federal prison for insider trading.
“Ying thought of his own financial gain before the millions of people exposed in this data breach even knew they were victims,” said U.S. Attorney Byung J. “BJay” Pak in a press release. “He abused the trust placed in him and the senior position he held to profit from inside information.”
The charges stem from the massive data breach Equifax was hit by in 2017, which compromised the names, Social Security numbers, birth dates, and addresses of more than 145 million Americans. At the time, Jun Ying was the CIO of Equifax U.S. Information Solutions, and as a result, was made aware of the data breach before it was became public.
As the Justice Department explained, on Friday, August 25, 2017, Ying texted a co-worker that the breach “sounds bad. We may be the one breached.” The following Monday, Ying searched online about the impact Experian’s 2015 data breach had on its stock price, and later that morning, he exercised all of his stock options, receiving 6,815 shares of Equifax stock, which he then sold. Ying made more than $950,000, and resulted in a gain of over $480,000, avoiding a loss of over $117,000. On September 7, 2017, Equifax publicly announced its data breach, and its stock price fell.
Ying was sentenced to four months in prison, and one year of supervised release. He has also been ordered to pay restitution of $117,117.61, as well as a fine of $55,000.
“If company insiders don’t follow the rules that govern all investors, they will face the consequences for their actions. Otherwise the public’s trust in the stock market will erode,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “The FBI will do everything in its power to stop anyone who takes unfair advantage of their insider knowledge.”