Description: Many of us recall the Equifax data hack last year. Approximately 150 million consumers may have had their private data fall into the hands of the hackers. And many were shocked to hear last year that Equifax waited a number of weeks before revealing the security breach to the public. Now we are finding out that an insider is facing both criminal and civil charges for using information about the breach to dump his Equifax shares prior to Equifax informing the public about the matter. Reportedly, this helped the employee avoid a loss of over $100,000 on his shares. But perhaps he is now reconsidering the value of this trade.
Date: March 15, 2018
1) Do you know anyone who had their information compromised in the Equifax breach?
2) What are some of the ethical issues involved with insider trading like this?
3) On page 430 of Wiley’s Financial Accounting: Tools for Business Decision Making, you can read about the important role Equifax and similar agencies perform in helping companies measure risk associated with default by customers. Do you think this case of insider trading will impact Equifax’s business?