Former Equifax Manager Sudhakar Reddy Bonthu was just sentenced to eight months house arrest following his guilty plea admitting he used non-public information to profit off of the credit reporting agency’s massive data breach.
Last year, just before Equifax announced that it had exposed the data of more than 148 million American consumers to hackers, Bonthu bought 86 “put” options in Equifax stock that expired on September 15, 2017, ahead of the subsequent drop in Equifax’s stock value in the wake of the breach.
A member of the Equifax software development team, Bonthu had knowledge of the breach before the public and his purchase of options constituted insider trading, as well as a breach of Equifax's employee policy prohibiting the purchase of option contracts on Equifax stock.
“Bonthu intentionally took advantage of information entrusted to him in order to make a quick profit,” U.S. Attorney Byung Pak said in a statement.
“The integrity of the stock markets and the confidence of investors are impaired by those who use nonpublic information for personal gain,” Pak added
In addition to eight months of house arrest, Bonthu was fined $50,000 and ordered to forfeit $75,979.
“If we don’t hold company insiders to the same rules that govern regular investors, the public’s confidence in the stock market erodes,” Chris Hacker, special agent in charge of Federal Bureau of Investigation Atlanta said in a statement.
“The FBI will do everything in its power to hold accountable those who choose to take advantage of their inside knowledge,” Hacker added.