Four Equifax executives who sold stock in the days after the company discovered a security breach had no knowledge of the incident when they made the trades, the company said.
A special committee of the firm’s board that investigated the sales also determined the executives obtained appropriate clearance from Equifax’s legal department and that the transactions complied with company policy, Atlanta-based Equifax said Friday in a news release.
The computer hack that exposed the personal data of 145 million U.S. consumers was discovered by the credit-reporting company on July 29. Filings show that between Aug. 1 and Aug. 2, Chief Financial Officer John Gamble, Joseph Loughran, president of U.S. information solutions, and Rodolfo Ploder, president of workforce solutions, sold stock valued about $1.8 million.
Friday’s release also said that Douglas Brandberg, a senior vice president of investor relations at Equifax, sold 1,724 shares on Aug. 2. His trade — which totaled about $251,000 — hasn’t been previously reported since he isn’t considered a named executive officer and not required to publicly disclose stock trades.
“The conclusion that the company executives in question traded appropriately is an extremely important finding and very reassuring,” Chairman Mark L. Feidler said in the release. “We will not tolerate any violation of company policy or the law regarding the trading of securities.”
The U.S. Justice Department opened a criminal investigation into whether the Equifax executives violated insider trading laws with the sales, people familiar with the matter said Sept. 18. The Securities and Exchange Commission was also working with prosecutors on the probe, according to the people.
Spokesman for the DOJ and SEC didn’t immediately respond Friday to requests for comment on the board’s statement and the status of any agency investigations.
The committee appointed by Equifax’s board found that Gamble was the first of the four executives to learn of the breach during an offsite management meeting on Aug. 10, according to the statement. He was on vacation with his wife in Utah when the incident was uncovered, the company said. Loughran and Brandberg were made aware of the hack between Aug. 13 and Aug. 15, while Ploder wasn’t briefed on the matter until a senior leadership meeting on Aug. 22.
The special committee was made up independent directors and advised by outside counsel, the firm said in the release. As part of its investigation, the group reviewed 55,000 documents and conducted 62 interviews, including with the executives who sold the shares and employees in the legal department who approved the trades.
Equifax said the legal team imposed a trading moratorium on Aug. 15 for all employees that the company identified were aware of the breach. The special committee used the recipient list for the blackout notice to determine which employees should be reviewed, the company said in the release.
Equifax shares have dropped 23% since it disclosed the breach on Sept. 7, compared with the 4.7% advance of the S&P 500 Index.