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Three Equifax Managers Sold Stock Before Cyber Hack Was Revealed

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

#41

Post by pwg »

devmunchies wrote: post #25
hqian wrote: post #16

Earlier quoted context omitted.

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.

Off topic question... Is there a law about giving legal advice in a public forum if you're not a lawyer? Why do people add the disclaimer about not being a lawyer. Generally curious. Moreover, is there a law about impersonating lawyer in a public forum (not that any ethical person would do that of course)?

It likely is a result of "copy-catting" to some extent. For those that _are_ lawyers, giving legal advice without first clearly stating to the recipient that no implicit attorney-client relationship is being created can create just such a relationship (i.e., and therefore potentially subject the atty. to possible malpractice charges, etc.). So actual attorneys always preface any statements with the "not advice" comment. Because of that, some non-lawyers may have picked up upon the practice and started restating it as "I'm not a lawyer ..." from some belief that there is a legal requirement to do so.

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

#42

Post by khuey »

trjordan wrote: post #37
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.

It's hard to prove intent. If there's a history of these execs selling similar amounts of stock in other quarters, then it's probably not insider trading. If the paperwork trail started an hour after the first meeting where they learned about the breach, and they had never sold stock before, then it's probably insider trading. Since the truth is somewhere in between, it's hard to say. It's hard to believe that these…

Intent doesn't need to be proven. If you knew of the material non-public information and you then decided to execute a trade you're guilty of insider trading.

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

#44

Post by chrsstrm »

c22 wrote: post #38
wsxcde wrote: post #26

Earlier quoted context omitted.

And are we expecting normal people to do key management?

Perhaps Equifax could transition to a key escrow service for those who trust giant corporations more than themselves.

Sure, because of their stellar record protecting PII?

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

#45

Post by yen223 »

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.

"But my intuition about a thing and what the law says don't always match"

I wish more people on this forum recognized this

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

#46

Post by wildmusings »

khuey wrote: post #42
trjordan wrote: post #37

Earlier quoted context omitted.

It's hard to prove intent. If there's a history of these execs selling similar amounts of stock in other quarters, then it's probably not insider trading. If the paperwork trail started an hour after the first meeting where they learned about the breach, and they had never sold stock before, then it's probably insider trading. Since the truth is somewhere in between, it's hard to say. It's hard to believe that these…

Intent doesn't need to be proven. If you knew of the material non-public information and you then decided to execute a trade you're guilty of insider trading.

It's not that clear cut. Otherwise, no one in the leadership of a company would ever be allowed to buy or sell stock.

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

#47

Post by gpm »

devmunchies wrote: post #25
hqian wrote: post #16

Earlier quoted context omitted.

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.

Off topic question... Is there a law about giving legal advice in a public forum if you're not a lawyer? Why do people add the disclaimer about not being a lawyer. Generally curious. Moreover, is there a law about impersonating lawyer in a public forum (not that any ethical person would do that of course)?

Where I am (Ontario, Canada) I believe it is illegal to give legal advice if not a lawyer, and to impersonate a lawyer [0]. I'm not a lawyer and could be wrong of course... but the disclaimer costs me nothing and makes it moderately less likely to be illegal (and less likely to be prosecuted even if it is illegal)

[0] https://www.canlii.org/en/on/laws/stat/rso-1990-c-l8/latest/...

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

#48

Post by khuey »

wildmusings wrote: post #46
khuey wrote: post #42

Earlier quoted context omitted.

Intent doesn't need to be proven. If you knew of the material non-public information and you then decided to execute a trade you're guilty of insider trading.

It's not that clear cut. Otherwise, no one in the leadership of a company would ever be allowed to buy or sell stock.

Corporate leadership is usually reluctant to trade in the company's stock outside of a 10b5-1 plan because of this sort of problem.

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

#49

Post by ringaroundthetx »

abalone wrote: post #19
ringaroundthetx wrote: post #6

Earlier quoted context omitted.

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 inf…

here are the sells

http://google.brand.edgar-online.com/?sym=EFX

All of the guys in question all own 40,000 more shares than the few thousand they sold. Doesn't mean they weren't insider trading or avoiding losses, its a good defense though.

Selling outside of a predefined schedule is always at risk of some scrutiny, because they always have inside information.

Given the size of these sells, they probably need it to cover a margin call, since its common for people to borrow against their shares. Would suck if thats what it was because its damning for civil and criminal liability and would have been likely necessary for their solvency.

Enjoy

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