(Reuters) — The U.S. Securities and Exchange Commission said on Tuesday it had charged three individuals with illegally depositing and trading Equifax Inc. securities before the company announced it had experienced a massive data breach.
Equifax, a provider of consumer credit scores, disclosed in September 2017 that personal data of as many as 143 million US consumers were accessed by hackers between mid-May and July of that year, making it one of the largest data breaches in the US.
According to the SEC’s complaint, Equifax hired a public relations firm in August 2017 to help manage the media inquiries expected to result from the breach.
Ann Dishinger, who worked as a CFO at the public relations firm, found out about the Equifax breach through her role and tipped off her significant other, Lawrence Palmer, with the non-public news.
The SEC claims that Mr. Palmer then contacted a former client who arranged for the purchase of out-of-the-money Equifax put options with the agreement that the client and Mr. Palmer would split any trading profits.
The agency also claims that Mr. Palmer tipped off his brother and business partner, Jerrold Palmer, who then contacted a high school friend who arranged for the purchase of the same series of out-of-the-money put options from Equifax.
Lawrence Palmer̵7;s former client and Jerrold Palmer’s friend made about $35,000 and $73,000 in profits, respectively, according to the SEC. The SEC has charged the brothers along with Ms. Dishinger for violating its anti-fraud rules.
The three could not immediately be reached for comment.