Thirty-six U.S. senators on Tuesday called on federal authorities to investigate the sale of nearly $2 million in shares of credit bureau Equifax by company executives after a massive data breach, and one compared their actions to insider trading.
The lawmakers signed a letter asking the U.S. Department of Justice, the Securities and Exchange Commission and the Federal Trade Commission to look into about $1.8 million in stock sales by three executives between July 29 — the day Equifax said it learned that its systems were hacked in mid-May — and when they made it public last week.
“If that happened, somebody needs to go to jail,” Senator Heidi Heitkamp, a Democrat on the Senate Banking Committee, said at a credit union industry conference in Washington. “It’s a problem when people can act with impunity with no consequences. How is that not insider trading?”
Cybersecurity experts believe the breach is one of the largest data hacks ever disclosed.
On Wall Street on Tuesday, Equifax closed 2.5 percent higher at $115.96, slightly reversing a 21 percent slide since the hack was reported.
In an opinion piece in USA Today, Equifax Chief Executive Officer Richard Smith apologized for the breach and vowed the company “will make changes.”
He said more than 15 million people have visited the firm’s support website and 11.5 million are enrolling in credit monitoring and identity theft protection.
The company at first thought the intrusion was limited, Smith said. Equifax hired a cybersecurity firm and spent “thousands of hours” investigating before informing the public six weeks after the breach was discovered, he said.
“We are devoting extraordinary resources to make sure this kind of incident doesn’t happen again,” Smith said.
Smith did not address the stock sale issue.
In their letter, the lawmakers, led by Jack Reed, a Democrat, and John Kennedy, a Republican, requested “a thorough examination of any unusual trading, including any atypical options trading, for violations of insider trading law.”
“We request that you spare no effort in your investigations and in enforcing the law to the fullest extent,” the lawmakers said.