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Dude "earned" ~1.5 million exercising his stock options and acting on insider knowledge. He gained $500k and sold before the stock fell. He has to pay back ab

Dude "earned" ~1.5 million exercising his stock options and acting on insider knowledge. He gained $500k and sold before the stock fell. He has to pay back about $175k and go to jail for 4 months. Am I reading this right? Keep doing what you're doing, Ying.

Zombieball 7y ago
If I was a CIO of a large company, I would not spend 4 months in jail just to gain $500k extra. Not worth it.
- StudentStuff 7y ago
  He cashed out $1 million in shares not knowing if these shares would become near worthless shortly after selling them. Considering it was a $175k fine, he eliminated serious risk to his personal finances. Many rational people would do what this CIO did given this minor fine and brief prison sentence.
  - raverbashing 7y ago
    "eliminated serious risk" that's textbook beancounter thinking What's the impact of this conviction in his future earnings?
  - Zombieball 7y ago
    Maybe I am overestimating what he earned in a year. Tried a quick search to figure out what % of his take home income this was. I am not sure at what point I would start to consider 4 months in jail for insider trading “worth it” (again this was a plea deal, could’ve been higher). If all your personal wealth is tied up in a single company’s stock then you obviously run a risk of losing it all. The solution to that is diversifying your portfolio, not insider trading.
    - Sebguer 7y ago
      Their current CISO makes 3.9 million in total comp: https://www1.salary.com/Jamil-Farshchi-Salary-Bonus-Stock-Options-for-EQUIFAX-INC.html https://www1.salary.com/Jamil-Farshchi-Salary-Bonus-Stock-Op...
  - godzillabrennus 7y ago
    His lifetime earnings will now be greatly diminished as a felon. He would likely have spent a fortune on legal fees before accepting this plea. He made a very stupid decision and it will impact the remainder of his life.
    - human20190310 7y ago
      His potential lifetime earnings were probably already suffering as a result of being a CIO who presided over a massive data breach.
      - g051051 7y ago
        He was CIO of one of the business units (Equifax U.S. Information Solutions), not the whole company. That guy (Dave Webb) resigned after the breach, and Jun Ying was going to replace him.
      - true_tuna 7y ago
        I doubt that. Nobody seemed to care that he really shat the bed.
    - true_tuna 7y ago
      America, where the legal fees hurt worse than the punishment.
      - nojvek 7y ago
        Well, it’s the same for puny things. Insurance spike hurts way more than an over speeding fine.
  - Macross8299 7y ago
    It really depends on how precarious he thought his position was after the breach. If his career as an executive would not be significantly harmed by breach, trading 4 months in jail and 5 million+ future career earnings as an executive for a 500k payday is not something rational people do, IMHO.
- ergocoder 7y ago
  Yeah, not really worth it. A rank-and-file engineer at Google already earns $200k to $500k. This is a C-level at a large company. I'd say $500K isn't much. Very dumb decision by CIO, to be honest.
stefan_ 7y ago
The difference to selling his options after the data breach was only 117k, though. That was the profit through insider trading.
- avip 7y ago
  ... in retrospect.
nilkn 7y ago
He lost his career and all subsequent earnings, which would have been substantial at the C-level executive tier. He’s only ~42 — this loss of earnings will vastly exceed a small $500k payday at that career level. And we don’t see the probably astronomical figure he paid in legal fees. I find it very hard to believe he actually would consider this an optimal investment strategy.
- 4ntonius8lock 7y ago
  This logic literally applies to everyone going to jail. It's not like C level people are some blue blood creature that feels the consequences of a criminal record differently than the rest of us.
  - user5994461 7y ago
    C levels are making multiple millions per year and could retire anytime. They don't need to get a new job. The $1M from this sale alone is about what many people would earn in an entire lifetime.
    - hammock 7y ago
      >C levels are making multiple millions per year and could retire anytime You must not know many C levels... The majority of those in my sphere are loaded down with jumbo mortgages, private school and college obligations. And they're not all making multiple millions per year.
      - alasdair_ 7y ago
        >You must not know many C levels... The majority of those in my sphere are loaded down with jumbo mortgages, private school and college obligations. And they're not all making multiple millions per year. The average CIO at a fortune 500 (which is what we're talking about) gets $1.4MM according to https://blogs.wsj.com/cio/2016/09/12/small-data-what-fortune-500-cios-get-paid/ https://blogs.wsj.com/cio/2016/09/12/small-data-what-fortune... So yes, not multiple millions but it's quite a difference from the average startup CIO.
beering 7y ago
I think that's not an accurate description. He avoided $117,000 in losses by trading on inside info. The gain is just sale price - purchase price. If he hadn't traded on insider info, he would've been able to gain $500k - $117k since Equifax stock did not go below his purchase price. So he had to pay back what he avoided losing plus $55k, plus serve time. I think the monetary fine is pretty low, but the gov't is not stupid - they made sure he came out negative.
- mikeash 7y ago
  I don’t know if I agree with the “not stupid” part. It may have worked out this time but there are many examples where the fine is less than the gain. Although those examples are often less about stupidity and more about not wanting to actually punish.
alasdair_ 7y ago
>He has to pay back about $175k and go to jail for 4 months. He also lost his job, has a felony conviction that will harm his ability to find another one and likely paid a fuckton in lawyers fees that exceeded any gain he made. Not saying this was a fair sentence - I think it was lenient - but the top of the line number isn't the whole punishment.
- koolba 7y ago
  > He also lost his job, has a felony conviction that will harm his ability to find another one and likely paid a fuckton in lawyers fees that exceeded any gain he made. Harm is too soft a word. It’s down right impossible to get a job in a regulated industry with a felony conviction.
  - deleted 7y ago
    [deleted]
true_tuna 7y ago
Don’t you know by now that the American legal system doesn’t punish the rich and powerful?

Zombieball 7y ago

If I was a CIO of a large company, I would not spend 4 months in jail just to gain $500k extra. Not worth it.

StudentStuff 7y ago
He cashed out $1 million in shares not knowing if these shares would become near worthless shortly after selling them. Considering it was a $175k fine, he eliminated serious risk to his personal finances. Many rational people would do what this CIO did given this minor fine and brief prison sentence.
- raverbashing 7y ago
  "eliminated serious risk" that's textbook beancounter thinking What's the impact of this conviction in his future earnings?
- Zombieball 7y ago
  Maybe I am overestimating what he earned in a year. Tried a quick search to figure out what % of his take home income this was. I am not sure at what point I would start to consider 4 months in jail for insider trading “worth it” (again this was a plea deal, could’ve been higher). If all your personal wealth is tied up in a single company’s stock then you obviously run a risk of losing it all. The solution to that is diversifying your portfolio, not insider trading.
  - Sebguer 7y ago
    Their current CISO makes 3.9 million in total comp: https://www1.salary.com/Jamil-Farshchi-Salary-Bonus-Stock-Options-for-EQUIFAX-INC.html https://www1.salary.com/Jamil-Farshchi-Salary-Bonus-Stock-Op...
- godzillabrennus 7y ago
  His lifetime earnings will now be greatly diminished as a felon. He would likely have spent a fortune on legal fees before accepting this plea. He made a very stupid decision and it will impact the remainder of his life.
  - human20190310 7y ago
    His potential lifetime earnings were probably already suffering as a result of being a CIO who presided over a massive data breach.
    - g051051 7y ago
      He was CIO of one of the business units (Equifax U.S. Information Solutions), not the whole company. That guy (Dave Webb) resigned after the breach, and Jun Ying was going to replace him.
    - true_tuna 7y ago
      I doubt that. Nobody seemed to care that he really shat the bed.
  - true_tuna 7y ago
    America, where the legal fees hurt worse than the punishment.
    - nojvek 7y ago
      Well, it’s the same for puny things. Insurance spike hurts way more than an over speeding fine.
- Macross8299 7y ago
  It really depends on how precarious he thought his position was after the breach. If his career as an executive would not be significantly harmed by breach, trading 4 months in jail and 5 million+ future career earnings as an executive for a 500k payday is not something rational people do, IMHO.
ergocoder 7y ago
Yeah, not really worth it. A rank-and-file engineer at Google already earns $200k to $500k. This is a C-level at a large company. I'd say $500K isn't much. Very dumb decision by CIO, to be honest.

stefan_ 7y ago

The difference to selling his options after the data breach was only 117k, though. That was the profit through insider trading.

avip 7y ago
... in retrospect.

nilkn 7y ago

He lost his career and all subsequent earnings, which would have been substantial at the C-level executive tier. He’s only ~42 — this loss of earnings will vastly exceed a small $500k payday at that career level. And we don’t see the probably astronomical figure he paid in legal fees. I find it very hard to believe he actually would consider this an optimal investment strategy.

4ntonius8lock 7y ago
This logic literally applies to everyone going to jail. It's not like C level people are some blue blood creature that feels the consequences of a criminal record differently than the rest of us.
- user5994461 7y ago
  C levels are making multiple millions per year and could retire anytime. They don't need to get a new job. The $1M from this sale alone is about what many people would earn in an entire lifetime.
  - hammock 7y ago
    >C levels are making multiple millions per year and could retire anytime You must not know many C levels... The majority of those in my sphere are loaded down with jumbo mortgages, private school and college obligations. And they're not all making multiple millions per year.
    - alasdair_ 7y ago
      >You must not know many C levels... The majority of those in my sphere are loaded down with jumbo mortgages, private school and college obligations. And they're not all making multiple millions per year. The average CIO at a fortune 500 (which is what we're talking about) gets $1.4MM according to https://blogs.wsj.com/cio/2016/09/12/small-data-what-fortune-500-cios-get-paid/ https://blogs.wsj.com/cio/2016/09/12/small-data-what-fortune... So yes, not multiple millions but it's quite a difference from the average startup CIO.

beering 7y ago

I think that's not an accurate description. He avoided $117,000 in losses by trading on inside info. The gain is just sale price - purchase price. If he hadn't traded on insider info, he would've been able to gain $500k - $117k since Equifax stock did not go below his purchase price. So he had to pay back what he avoided losing plus $55k, plus serve time. I think the monetary fine is pretty low, but the gov't is not stupid - they made sure he came out negative.

mikeash 7y ago
I don’t know if I agree with the “not stupid” part. It may have worked out this time but there are many examples where the fine is less than the gain. Although those examples are often less about stupidity and more about not wanting to actually punish.

alasdair_ 7y ago

>He has to pay back about $175k and go to jail for 4 months. He also lost his job, has a felony conviction that will harm his ability to find another one and likely paid a fuckton in lawyers fees that exceeded any gain he made. Not saying this was a fair sentence - I think it was lenient - but the top of the line number isn't the whole punishment.

koolba 7y ago
> He also lost his job, has a felony conviction that will harm his ability to find another one and likely paid a fuckton in lawyers fees that exceeded any gain he made. Harm is too soft a word. It’s down right impossible to get a job in a regulated industry with a felony conviction.
- deleted 7y ago
  [deleted]

true_tuna 7y ago

Don’t you know by now that the American legal system doesn’t punish the rich and powerful?