Former Indian American Equifax manager sentenced for insider trading

0

Sudhakar Reddy Bonthu, a former Indian American manager at Equifax, was sentenced to eight months of home confinement, fined $50,000 and ordered to forfeit $75,979, after he pleaded guilty to insider trading.

According to a Department of Justice press release, while working as a member of the team assembled to respond to the company’s massive data breach in 2017, Bonthu had bought and sold Equifax stock options before the company’s data breach was publicly announced.

During the summer of 2017, Equifax was the victim of a data breach, where hackers acquired names, Social Security numbers, birth dates, and addresses of over 145 million consumers.

Bonthu, 44, of Atlanta, Georgia, was a software product development manager for Equifax’s Global Consumer Services team in August 2017 and was asked to assist in developing data breach remediation applications for an unnamed company and was further told that the project was a high priority with a short deadline because the company intended to announce the breach publicly on September 6, 2017, according to a press release.

During the breach, his primary role was to help develop an online user interface that would allow consumers to determine whether they were impacted by the breach.

Although he was never directly told it was actually Equifax that had been breached, he was entrusted with information that led him to that conclusion.

According to the press release, Bonthu bought 86 “put” options in Equifax stock on September 1, 2017, which expired on September 15, 2017.

Those options allowed him to profit if the value of Equifax stock dropped within that two-week period.

The trades also violated company policy, which did not allow employees to purchase option contracts in Equifax common stock, while the company publicly disclosed the data breach on September 7, 2017, and its stock fell the next day.

Bonthu then exercised his put options, making a profit of more than $75,000.

“Bonthu intentionally took advantage of information entrusted to him in order to make a quick profit. The integrity of the stock markets and the confidence of investors are impaired by those who use nonpublic information for personal gain,” U.S. Attorney Byung J. “BJay” Pak is quoted saying in a press release.

Share