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Also, let us not forget, Equifax execs sold stock before hack was disclosed https://money.cnn.com/2017/09/08/investing/equifax-stock-insider-sales-hack-data-br

Also, let us not forget, Equifax execs sold stock before hack was disclosed https://money.cnn.com/2017/09/08/investing/equifax-stock-insider-sales-hack-data-breach/index.html https://money.cnn.com/2017/09/08/investing/equifax-stock-ins... > Three Equifax executives sold shares of the credit-reporting company worth nearly $2 million shortly after a massive data breach was discovered.

FDSGSG 7y ago
I understand that this looks unfair, but why is this actually bad?
- p0cc 7y ago
  Insider Trading [0] is a crime in the US. [0]: https://en.wikipedia.org/wiki/Insider_trading https://en.wikipedia.org/wiki/Insider_trading
  - perl4ever 7y ago
    It might or might not have been insider trading. However, I think a journalist is seriously delinquent if they don't acknowledge that insiders normally schedule their stock trades ahead of time to insulate from insider trading accusations. A reader needs to know whether this was the case or not in order to be appropriately outraged.
    - thephyber 7y ago
      It was. I posted the SEC PR filing in reply to another comment on this article. > I think a journalist is seriously delinquent if they don't acknowledge ... I'm not sure I agree. If you consider how many topics journalists write about and how much necessary context that they would have to background-boilerplate, a 2 sentence update could easily become the length and readability of a ToS contract.
      - perl4ever 7y ago
        If there is one single thing that you could put in a sentence or two, but it makes your article irrelevant, then the maximum word count is not the reason it was left out. This isn't like, one article with a unique context. There have been lots of similar ones and will continue to be.
  - FDSGSG 7y ago
    So what? The question would be "Why is insider trading actually bad in this specific instance?" not "Is insider trading actually a crime?" "Insider trading creates perverse incentives" would not inherently mean that the purported insider trading by equifax executives was a bad thing.
eloff 7y ago
Unless they can prove they intended to sell that stock anyway before they had knowledge of the hack, that seems criminal.
- jolmg 7y ago
  Isn't that guilty until proven innocent? Rather, I would think that whoever does the prosecution would need to prove the execs knew of the hack prior to selling the stock. The execs don't have to prove anything.
  - all2 7y ago
    A subpoena of exec email accounts could sort out who knew what very quickly.
  - firethief 7y ago
    When you are exposed to information that it would be improper to act on, you generally have to demonstrate affirmatively that your decisions aren't based on it to stay out of hot water. It's the same deal as clean-room reverse engineering, where you need separate teams with a lawyer as a firewall to prove you're only replicating certain aspects of the source. It's not that presumption of innocence isn't applicable; it's just, when your defense is that you tracked provenance in your head and were careful to ignore the tainted information when thinking about certain things, it probably won't be hard to prove you guilty.
  - eloff 7y ago
    If they're high level execs, presumably they know about major company news. I don't think that's hard for the prosecution to establish.
- perl4ever 7y ago
  Executives do normally schedule selling stock ahead of time. If no investigation is happening, that might be one obvious explanation.
  - refurb 7y ago
cfitz 7y ago
...insider trading? If there’s not an investigation into these “executives” already underway, there should be.
- reilly3000 7y ago
  How do we turn ‘should be’ into reality? From a tech perspective I feel like issues like this should have a public canonical ID. That would help regulators and reporters alike deliver information in a more clear, cost effective and accountable manner, disambiguation by default. Interested and affected parties could subscribe to updates on that key across the web.
  - sdenton4 7y ago
    I think guillotines would help motivate more meaningful regulation. They're why we have this whole rule of law thing in the first place. If the plutocrats get too far out of line, they maybe need to be reminded of the alternative.
    - skyyler 7y ago
      Do you remember when France brought the guillotines out? It didn't end very well for the people...
      - reilly3000 7y ago
        Hey y'all let's bring it down. We're all on the same team. The rule of law and liberty team. The 'we're better than divide and conquer' team.
- thephyber 7y ago
  Already done.[1] Literally took me 10x longer to log into HN to comment than it took me to verify my vague memory of this event. In addition to the SEC litigation into the executives, Equifax did a company-wide investigation and found that one of the developers for that breach notification website (the one that provided tons of false positive and false negatives and was spoofed by a security researcher) traded using his SO's equities trading account before the breach was revealed. The company found him and he has also been prosecuted[2]. [1] https://www.sec.gov/news/press-release/2018-115 https://www.sec.gov/news/press-release/2018-115 [2] https://www.zdnet.com/article/equifax-engineer-who-designed-breach-portal-gets-8-months-of-house-arrest-for-insider-trading/ https://www.zdnet.com/article/equifax-engineer-who-designed-...
oh_sigh 7y ago
To be fair, one guy sold his stock because it seemed like people were acting really fishy and not telling him anything, and he put 2 and 2 together. So no one explicitly told him insider information, but he is still being charged. If I worked at Amazon and saw Jeff Bezos in a meeting room going ballistic on the lead security engineer, would I be insider trading if I shorted amazon stock?
- 3pt14159 7y ago
  Yes actually. That's literally insider information.
- jedberg 7y ago
  > If I worked at Amazon and saw Jeff Bezos in a meeting room going ballistic on the lead security engineer, would I be insider trading if I shorted amazon stock? Yes, for sure. You'd still be acting on non-public information (the fact that he went ballistic on the head of security). If you leaked that meeting to the press first, then maybe you'd be in the clear on insider trading (but you'd be in deep water for the leak!).
  - oh_sigh 7y ago
    Would seeing an angry Bezos count as "material information"? There are all sorts of secenarios where Jeff could be angry with a person - when did it become material?
    - pishpash 7y ago
      If it moved the stock price afterwards it was material. Point is you won't necessarily know at the time.
  - boring_twenties 7y ago
    No, it's only insider trading if it's material non-public information. If you can twist that definition to make it even remotely plausible that a guy getting yelled at by his boss qualifies, I'll be very impressed. https://www.cfainstitute.org/ethics/codes/std-of-practice-guidance/stds-of-practice-II-A#material https://www.cfainstitute.org/ethics/codes/std-of-practice-gu...

FDSGSG 7y ago

I understand that this looks unfair, but why is this actually bad?

p0cc 7y ago
Insider Trading [0] is a crime in the US. [0]: https://en.wikipedia.org/wiki/Insider_trading https://en.wikipedia.org/wiki/Insider_trading
- perl4ever 7y ago
  It might or might not have been insider trading. However, I think a journalist is seriously delinquent if they don't acknowledge that insiders normally schedule their stock trades ahead of time to insulate from insider trading accusations. A reader needs to know whether this was the case or not in order to be appropriately outraged.
  - thephyber 7y ago
    It was. I posted the SEC PR filing in reply to another comment on this article. > I think a journalist is seriously delinquent if they don't acknowledge ... I'm not sure I agree. If you consider how many topics journalists write about and how much necessary context that they would have to background-boilerplate, a 2 sentence update could easily become the length and readability of a ToS contract.
    - perl4ever 7y ago
      If there is one single thing that you could put in a sentence or two, but it makes your article irrelevant, then the maximum word count is not the reason it was left out. This isn't like, one article with a unique context. There have been lots of similar ones and will continue to be.
- FDSGSG 7y ago
  So what? The question would be "Why is insider trading actually bad in this specific instance?" not "Is insider trading actually a crime?" "Insider trading creates perverse incentives" would not inherently mean that the purported insider trading by equifax executives was a bad thing.

eloff 7y ago

Unless they can prove they intended to sell that stock anyway before they had knowledge of the hack, that seems criminal.

jolmg 7y ago
Isn't that guilty until proven innocent? Rather, I would think that whoever does the prosecution would need to prove the execs knew of the hack prior to selling the stock. The execs don't have to prove anything.
- all2 7y ago
  A subpoena of exec email accounts could sort out who knew what very quickly.
- firethief 7y ago
  When you are exposed to information that it would be improper to act on, you generally have to demonstrate affirmatively that your decisions aren't based on it to stay out of hot water. It's the same deal as clean-room reverse engineering, where you need separate teams with a lawyer as a firewall to prove you're only replicating certain aspects of the source. It's not that presumption of innocence isn't applicable; it's just, when your defense is that you tracked provenance in your head and were careful to ignore the tainted information when thinking about certain things, it probably won't be hard to prove you guilty.
- eloff 7y ago
  If they're high level execs, presumably they know about major company news. I don't think that's hard for the prosecution to establish.
perl4ever 7y ago
Executives do normally schedule selling stock ahead of time. If no investigation is happening, that might be one obvious explanation.
- refurb 7y ago

cfitz 7y ago

...insider trading? If there’s not an investigation into these “executives” already underway, there should be.

reilly3000 7y ago
How do we turn ‘should be’ into reality? From a tech perspective I feel like issues like this should have a public canonical ID. That would help regulators and reporters alike deliver information in a more clear, cost effective and accountable manner, disambiguation by default. Interested and affected parties could subscribe to updates on that key across the web.
- sdenton4 7y ago
  I think guillotines would help motivate more meaningful regulation. They're why we have this whole rule of law thing in the first place. If the plutocrats get too far out of line, they maybe need to be reminded of the alternative.
  - skyyler 7y ago
    Do you remember when France brought the guillotines out? It didn't end very well for the people...
    - reilly3000 7y ago
      Hey y'all let's bring it down. We're all on the same team. The rule of law and liberty team. The 'we're better than divide and conquer' team.
thephyber 7y ago
Already done.[1] Literally took me 10x longer to log into HN to comment than it took me to verify my vague memory of this event. In addition to the SEC litigation into the executives, Equifax did a company-wide investigation and found that one of the developers for that breach notification website (the one that provided tons of false positive and false negatives and was spoofed by a security researcher) traded using his SO's equities trading account before the breach was revealed. The company found him and he has also been prosecuted[2]. [1] https://www.sec.gov/news/press-release/2018-115 https://www.sec.gov/news/press-release/2018-115 [2] https://www.zdnet.com/article/equifax-engineer-who-designed-breach-portal-gets-8-months-of-house-arrest-for-insider-trading/ https://www.zdnet.com/article/equifax-engineer-who-designed-...

oh_sigh 7y ago

To be fair, one guy sold his stock because it seemed like people were acting really fishy and not telling him anything, and he put 2 and 2 together. So no one explicitly told him insider information, but he is still being charged. If I worked at Amazon and saw Jeff Bezos in a meeting room going ballistic on the lead security engineer, would I be insider trading if I shorted amazon stock?

3pt14159 7y ago
Yes actually. That's literally insider information.
jedberg 7y ago
> If I worked at Amazon and saw Jeff Bezos in a meeting room going ballistic on the lead security engineer, would I be insider trading if I shorted amazon stock? Yes, for sure. You'd still be acting on non-public information (the fact that he went ballistic on the head of security). If you leaked that meeting to the press first, then maybe you'd be in the clear on insider trading (but you'd be in deep water for the leak!).
- oh_sigh 7y ago
  Would seeing an angry Bezos count as "material information"? There are all sorts of secenarios where Jeff could be angry with a person - when did it become material?
  - pishpash 7y ago
    If it moved the stock price afterwards it was material. Point is you won't necessarily know at the time.
- boring_twenties 7y ago
  No, it's only insider trading if it's material non-public information. If you can twist that definition to make it even remotely plausible that a guy getting yelled at by his boss qualifies, I'll be very impressed. https://www.cfainstitute.org/ethics/codes/std-of-practice-guidance/stds-of-practice-II-A#material https://www.cfainstitute.org/ethics/codes/std-of-practice-gu...