Dozens of senators seek investigation of Equifax stock sales

More than one-third of U.S. senators want the Securities and Exchange Commission and the Department of Justice to get to the bottom of whether Equifax managers violated insider trading laws when they sold stock days after the company found out it was hacked.

Thirty-six lawmakers, consisting of mostly Democrats and some Republicans, signed letters sent to the agencies and the Federal Trade Commission Tuesday. The bipartisan request shows the degree of public outrage over a cyber breach that may have led to the theft of 143 million Americans' personal data -- and how it is reverberating in Washington.

The stock sales in question involve Equifax Chief Financial Officer John Gamble, President of U.S. Information Solutions Joseph Loughran and President of Workforce Solutions Rodolfo Ploder. The executives unloaded shares worth almost $1.8 million just days after the company discovered a security breach on July 29. Atlanta-based Equifax publicly disclosed the hack six weeks later, and has repeatedly said the managers didn't know of the breach at the time they sold shares.

"We request that you conduct a thorough examination of any unusual trading, including any atypical options trading, for violations of insider trading law," the senators, led by Rhode Island Democrat Jack Reed and Louisiana Republican John Kennedy, wrote in the letter. "We request that you spare no effort in your investigations and in enforcing the law to the fullest extent against anyone who is found to be at fault."

When asked by reporters Wednesday about the mounting congressional pressure for the SEC to investigate, Chairman Jay Clayton declined to comment on Equifax and whether the agency was looking into the executives' trades. Clayton said the SEC is working to increase public awareness of the "substantial systemic risks" associated with cybersecurity.

FTC Acting Chairwoman Maureen Ohlhausen told journalists Tuesday that her agency is looking closely at the Equifax matter, though she stopped short of saying it has opened a formal investigation. The Justice Department didn't respond to an email seeking comment.

The request for insider trading investigations is part of a growing backlash on Capitol Hill that Equifax is struggling to contain.

At least six congressional committees are examining the incident, scrutinizing how the breach happened and why Equifax waited more than a month to disclose it. Lawmakers are also using the hack to push policy goals, such as calling for stiffer requirements on how companies handle consumer data and the removal of barriers consumers face in suing financial companies.

Regulators are also looking closely at Equifax, which is among a handful of companies that control data such as credit histories that banks rely on to issue loans. The Consumer Financial Protection Bureau, which has the authority to monitor credit-reporting companies and go after firms that fail to protect consumers, said it is looking into the breach and how the company has responded.

 

 

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