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Three Equifax Managers Sold Stock Before Cyber Hack Was Revealed

bloomberg.com

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Re: Three Equifax Managers Sold Stock Before Cyber Hack Was Revealed

#11

Post by khuey »

stygiansonic wrote: post #5

FTA: " None of the filings lists the transactions as being part of 10b5-1 pre-scheduled trading plans. " Anyone with more knowledge: How normal is this sort of behaviour?

Securities laws in the United States prohibit trades made with "material non-public information". A 10b5-1 plan is an affirmative defense to insider trading. The basic idea is that before you get access to material non-public information, you decide "I want to buy/sell X shares on the second Tuesday of every month" or similar. Because the trades are made in a way that was determined before you had access to material non-public information, this is not considered insider trading.

(IANAL, this is not legal advice, etc etc)

Re: Three Equifax Managers Sold Stock Before Cyber Hack Was Revealed

#12

Post by loeg »

QUFB wrote: post #4
tdeck wrote: post #3

Aren't senior executives legally required to submit their trading plans well in advance of any stock sale? That certainly seemed to be the case at my last employer.

From the article: > None of the filings lists the transactions as being part of 10b5-1 pre-scheduled trading plans.

That doesn't answer the question. We all read that the trades were not planned in advance. The question is, is that by definition illegal? Or were the trades only illegal because they had insider knowledge that the price was about to drop?

Re: Three Equifax Managers Sold Stock Before Cyber Hack Was Revealed

#14

Post by jdmichal »

korethr wrote: post #7

So, does this count as insider trading? My intuition says 'yes'. But my intuition about a thing and what the law says don't always match.

Insider trading is any trading performed using non-public knowledge. Theoretically even a pre-scheduled trade could be insider trading, if it relied on non-public knowledge which remained non-public until the time the trade executes. Of course, that's a pretty hard scenario to concoct, so generally pre-scheduled trades 3+ months out are considered safe for even high-level insiders. Not to mention all the extraneous movement that might happen within that same time period that could very well nullify any knowledge advantage.

Re: Three Equifax Managers Sold Stock Before Cyber Hack Was Revealed

#15

Post by mankash666 »

Credit reporting agencies are the cancer of the modern economy. They are rife with inaccuracies, and on top of that, highly vulnerable to hacking , as software engineering is just a cost for them, not their focus.

Their entire function needs to move to the blockchain. Their only value is that of a distributed, trust less ledger, and they charge horrible fees and sit in the middle for doing that terribly

Re: Three Equifax Managers Sold Stock Before Cyber Hack Was Revealed

#16

Post by hqian »

korethr wrote: post #7

So, does this count as insider trading? My intuition says 'yes'. But my intuition about a thing and what the law says don't always match.

Most likely yes. Actually if this doesn't count I don't know what is. However just like you, don't take my word, not a lawyer.

Re: Three Equifax Managers Sold Stock Before Cyber Hack Was Revealed

#17

Post by ConnorBoyd »

korethr wrote: post #7

So, does this count as insider trading? My intuition says 'yes'. But my intuition about a thing and what the law says don't always match.

They traded based on material, non-public information, so I would have to say yes, this is definitely insider trading, but I'm not a lawyer...

Re: Three Equifax Managers Sold Stock Before Cyber Hack Was Revealed

#18

Post by khuey »

loeg wrote: post #12
QUFB wrote: post #4

Earlier quoted context omitted.

From the article: > None of the filings lists the transactions as being part of 10b5-1 pre-scheduled trading plans.

That doesn't answer the question. We all read that the trades were not planned in advance. The question is, is that by definition illegal? Or were the trades only illegal because they had insider knowledge that the price was about to drop?

If they had access to material non-public information and then decided to trade it would be illegal. Trades that are not planned in advance are not illegal in and of themselves.

Re: Three Equifax Managers Sold Stock Before Cyber Hack Was Revealed

#19

Post by abalone »

ringaroundthetx wrote: post #6
stygiansonic wrote: post #5

FTA: " None of the filings lists the transactions as being part of 10b5-1 pre-scheduled trading plans. " Anyone with more knowledge: How normal is this sort of behaviour?

Pretty normal. Their lawyers likely said that as long as they reported in (via Form 3 and Form 4) then it would be complaint enough. So this was still transparency, and its just fodder for reporters to debate about, because without the Form 3 and Form 4 regulation, you would never know. Cost benefit analysis.

Uh, what? As another comment noted, they possessed "material non-public information" when they traded. Forms 3-5 just disclose the transaction, not the non-public information that we all just learned about.

This doesn't mean they are guilty of insider trading, especially if there is a pattern of recent sales, but it certainly doesn't absolve them. Definitely smarter to hold off on ad hoc trades until all material information goes public -- or go with a scheduled plan.

Re: Three Equifax Managers Sold Stock Before Cyber Hack Was Revealed

#20

Post by stuaxo »

That reminds me I need to update my address on Equifax. I found out it was wrong after being refused to be allowed to buy a mobile data plan (even though I had all the cash it counts as a credit issue).

After 5-6 phone calls to get the address added to their system, I never did the final one a few days later to get them to update me once it was in their system.

Absolute bunch of arses.

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