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Equifax Execs Sold Shares Before the Hack was Announced – But Was it Insider Trading?

Los Angeles Times
September 2017

Newport Beach-based shareholder Jason de Bretteville, chair of Stradling’s White Collar Criminal Defense practice group, and co-chair of the firm’s Enforcement Defense & Investigations practice group, was quoted in a Los Angeles Times article, regarding whether or not three Equifax executives, one of which includes its chief financial officer, engaged in insider trading when they sold thousands of shares after the company discovered a massive security breach:

 “Making a criminal insider-trading case can be more difficult,” said de Bretteville. “Prosecutors would have to show that the executives not only were in possession of material information, but also traded because of it. It has to be a situation where you say, ‘I see some impending event, and I’m going to trade in advance of it to avoid the negative impact of that event.” De Bretteville also commented that a “typical defense from those charges is for an executive to show that he or she made a stock sale for some other specific purpose — indicating that even if the executive made a trade while in possession of non-public information, that information was not the motivation for the trade.”