(Reuters) – A former Equifax Inc employee pleaded guilty on Monday to having engaged in insider trading before the credit reporting company last year disclosed a cyber attack that exposed the personal data of about 148 million people.
FILE PHOTO: Credit reporting company Equifax Inc. corporate offices are pictured in Atlanta, Georgia, U.S., September 8, 2017. REUTERS/Tami Chappell/File Photo
Sudhakar Reddy Bonthu, a former software development manager who was involved in assisting in Equifax’s response to the breach, pleaded guilty in federal court in Atlanta to a single insider trading count, prosecutors said.
Bonthu, 44, is one two former Equifax employees who federal prosecutors have accused of seeking to profit by trading on confidential information related to the cyber attack before the company disclosed the data breach last September.
Meg Strickler, his lawyer, confirmed Bonthu’s plea but had no other immediate comment. He is scheduled to be sentenced on Oct. 18.
Equifax fired Bonthu in March after he refused to cooperate with an internal investigation, according to the U.S. Securities and Exchange Commission, which has reached a related settlement with him. Equifax has said it was cooperating with authorities.
From May to July 2017, hackers gained access to Equifax databases, allowing them to acquire the names, Social Security numbers, birthdates and addresses for millions of people, according to the government.
Atlanta-based Equifax began investigating the breach in July 2017 after discovering the suspicious activity, and by August had determined that consumers’ data had likely been stolen, prosecutors alleged.
According to prosecutors, on Aug. 25, 2017, Bonthu, who belonged to an Equifax unit that developed security products for clients, was assigned with other employees to help respond to the breach, though he was not told Equifax itself was breached.
According to prosecutors, by Aug. 30, 2017, Bonthu knew that information from at least 100 million individuals had been exposed due to the breach.
The next day, he received an email with a file attached that included Equifax’s stock ticker symbol in its name, prosecutors said.
After determining that Equifax had been breached, Bonthu bought put options in its stock using his wife’s brokerage account prior to the announcement, allowing him to profit when the company’s stock price dropped, according to prosecutors.
Equifax disclosed the breach on Sept. 7, 2017, after the market closed. Its stock price dropped the next day, and Bonthu made a profit of more than $75,000, according to charging documents.
A separate insider trading case remains pending against Jun Ying, a former Equifax technology executive. He has pleaded not guilty.
Reporting by Nate Raymond in Boston; Editing by Tom Brown