Former Equifax Developer Sentenced for Insider Trading
A former software manager who helped to built a customer portal for Equifax following its catastrophic 2017 breach has been sentenced to eight months home confinement after pleading guilty to insider trading.
Sudhakar Reddy Bonthu, 44, of Atlanta, was also fined $50,000 and ordered to forfeit $75,979, according to the Department of Justice.
“Bonthu intentionally took advantage of information entrusted to him in order to make a quick profit,” said US attorney Byung Pak. “The integrity of the stock markets and the confidence of investors are impaired by those who use non-public information for personal gain.”
Bonthu, who was a software product development manager for Equifax’s Global Consumer Services team in August 2017, was called on to help develop an online interface designed for customers to check if they had been affected by the breach.
Although he wasn’t told directly that Equifax had been breached, Bonthu unsurprisingly worked it out for himself, also finding out the scale of the incident.
“On September 1, 2017, Bonthu bought 86 ‘put’ options in Equifax stock that expired on September 15, 2017. Those options allowed him to profit if the value of Equifax stock dropped within that two-week period. These trades also violated company policy, which did not allow employees to purchase option contracts in Equifax common stock,” the DoJ explained.
“Equifax publicly disclosed the data breach on September 7, 2017, and its stock fell the next day. Bonthu then exercised his put options, making a profit of more than $75,000.”
Another insider trading case is still being fought. Former Equifax CIO Jun Ying has pleaded not guilty to charges related to his sale of $1m of shares. Prosecutors allege he did so after hearing about the incident, but before the company announced it.
Source: Information Security Magazine