The U.S. Justice Department has opened a criminal investigation into whether top officials at Equifax Inc. violated insider trading laws when they sold stock before the company disclosed that it had been hacked, according to people familiar with the investigation.
Prosecutors are looking at the stock sales by Equifax Chief Financial Officer John Gamble; President of U.S. Information Solutions Joseph Loughran; and President of Workforce Solutions Rodolfo Ploder, said two people, who asked not to be named because the probe is confidential.
Equifax disclosed earlier this month that it discovered a security breach on July 29. The three executives sold shares worth almost $1.8-million in early August. The company has said the managers didn't know of the breach at the time they sold the shares.
To run afoul of laws that prohibit insider trading, a seller has to be aware of nonpublic information, said Stephen Crimmins, a former enforcement lawyer for the Securities and Exchange Commission.
The probe will be handled by the U.S. attorney's office in Atlanta, where the credit firm's headquarters is located, said one of the people. A spokesman for the U.S. attorney's office in Atlanta declined to comment.
–With assistance from Matt Robinson