The U.S. Justice Department has opened a criminal investigation into whether top officials at Equifax Inc. violated insider trading laws when they sold stock before the company disclosed that it had been hacked, according to people familiar with the investigation.
U.S. prosecutors in Atlanta, who the people said are looking into the share sales, said in a statement they are examining the breach and theft of people’s personal information in conjunction with the Federal Bureau of Investigation. The Securities and Exchange Commission is working with prosecutors on the investigation into stock sales, according to another person familiar with the matter.
The federal probes add a serious challenge to Equifax as lawmakers, state attorneys general and regulators scrutinize the breach that may have compromised the privacy of 143 million U.S. consumers. Equifax shares were little changed. The shares have fallen 35% since the breach was disclosed after market close in New York on Sept. 7.
Investigators are looking at the stock sales by Equifax’s chief financial officer, John Gamble; its president of U.S. information solutions, Joseph Loughran; and its president of workforce solutions, Rodolfo Ploder, said two of the people, who asked not to be named because the probe is confidential.
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The company and the executives didn’t immediately respond to requests for comment.
Equifax disclosed earlier this month that it discovered a security breach on July 29. The three executives sold shares worth almost $1.8 million in early August. The company has said the managers didn’t know of the breach at the time they sold the shares.
Regulatory filings don’t show that the transactions were part of pre-scheduled trading plans.