
Former Equifax CIO sentenced for insider trading - arkadiyt
https://www.justice.gov/usao-ndga/pr/former-equifax-employee-sentenced-insider-trading
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philshem
> The following Monday, Ying conducted web searches on the impact of
> Experian's 2015 data breach on its stock price.

This is the most embarrassing part. CIO’s gotta know better.

~~~
true_tuna
If the guy had any infosec sensibilities the breach wouldn’t have happened the
way it did to begin with.

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blitmap
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
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
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.

~~~
godzillabrennus
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
His potential lifetime earnings were probably already suffering as a result of
being a CIO who presided over a massive data breach.

~~~
g051051
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.

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jtdev
4 months!? The sentencing of white collar crimes in the U.S. juxtaposed to
drug offenses and crimes of desperation should make us all question the
legitimacy of our legal system.

~~~
ryanlol
OTOH insider trading while "unfair" doesn't necessarily hurt anyone.

(not that the crimes you mentioned necessarily hurt anyone either)

~~~
z3c0
The problem here is the disproportionate amount of "disincentive" occurring -
in this case Ying is basically making around $500k to spend 4 months in
prison. If somebody pitched that idea to me on its own, I'd at least put some
thought into it.

Drug offenders often get punished so disproportionately for their crime that
they're unable to take advantage of systems that would help them improve their
lives after their multi-year prison sentences (jobs, college, travel, etc.)
They certainly aren't going to have a few hundred thousand dollars waiting for
them when they got out.

This is clearly anecdotal, but a family member of mine - who was imprisoned
for 4 years in work camps over a drug offense - was given $35 and a "good
luck".

Edit: By the way, his career was ruined the moment he became accountable for
one of the worst data breaches in history - this conviction isn't what ruined
his career as a CIO.

~~~
jjeaff
That's not correct. He gained $550k by selling his stock. That was money he
could have cashed out at any time.

By trading on insider information, he saved himself $117k in future losses
(though not really because over time, I'm sure the stock will fully recover if
it hasn't already). Thus the fine of $117k claws back everything that he
gained due to his insider trading.

Plus, an additional $55k in fines. Plus who knows how much in lawyer fees. And
then of course a criminal record that won't help with future employment
prospects.

~~~
z3c0
Sure, I can admit that I was wrong about his "net profit" for his crime,
because that number was eyeballed.

However, the pedantry I made myself vulnerable to doesn't really change my
point that he's getting a disproportionately easier sentence than a drug
offender would get.

~~~
jjeaff
I agree. But I think the solution is lighter sentencing for drug crimes,
rather than higher sentencing for white collar crimes.

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m-p-3
He surely learned to be more careful next time or risk getting a slap on the
wrist again.

~~~
jjeaff
He had to pay back everything he earned due to the insider trade plus $55k in
fines. Plus prison for 4 months and a permanent criminal record. Doesn't sound
like a slap on the wrist for trading on inside information.

But I don't disagree that lots of other crimes are way overcharged.

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sverige
All that money apparently paid for good lawyers, and the social connections he
probably has didn't hurt either. It's a lot better to be rich than poor of
you're going to commit crimes.

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fnord77
all to avoid $117,000. A measly amount for someone making C-level money. His
biggest punishment is that his career is ruined.

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alaithea
This is doubly ridiculous. As CIO he ought to be held accountable for the loss
of millions of people's personal data. Instead, he gets what amounts to a slap
on the wrist for insider trading.

~~~
DawgFedora
He wasn’t the global CIO, he was the CIO of a business unit, and the
application that was exploited in the breach was NOT under his department.

I worked for him when this happened - he was a smart guy who happened to guess
right. He hadn’t been informed of the breach when he traded his options, he
just make an educated guess based upon things happening. I don’t think it was
right, but it definitely wasn’t malicious. The company could have closed the
trading window which would have prevented it.

The worst thing for him is that he would have been made the global CIO if he
hadn’t cashed in his options. The money in this transaction is peanuts
compared to what he lost there.

Edited: app was NOT in his dept

~~~
alaithea
What you are calling an "educated guess" is basically the definition of
insider trading.

> On Friday, August 25, 2017, Ying texted a co-worker that the breach they
> were working on “sounds bad. We may be the one breached.” The following
> Monday, Ying conducted web searches on the impact of Experian's 2015 data
> breach on its stock price. Later that morning, Ying exercised all of his
> stock options[.]

~~~
DawgFedora
Not according to precedent in the case referenced here:
[https://www.bloomberg.com/opinion/articles/2018-03-18/equifa...](https://www.bloomberg.com/opinion/articles/2018-03-18/equifax-
exec-sold-stock-after-hack-was-it-insider-trading).

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bariswheel
long bitcoin, short the banks.

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4ntonius8lock
I know it's a plea deal, but:

Reward: $1,000,000~ Profit

Potential Cost When Caught: Restitution $117,117.61 + $55,000 Fine + 4 Months
Jail Time

Odds of Getting Caught: ?

I feel the ? part is probably pretty low. Like single digit low.

Seems like pretty bad disincentive. Especially when compared to how we
disincentive petty things like shop lifting. How much more egregious will our
legal system get?

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esoterica
Read the article again, the profit was $117k, not $1m.

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4ntonius8lock
He cashed almost $1m.

He WOULD have lost $117k. So after all the chips fell, that was his ill-gotten
amount.

But he didn't know that at the time. He knew the stocks were going down. How
much is anyone's guess. The externalizations of their failure are a multi
billion dollar matter. It wasn't a small issue. There was a real potential
their stock would plummet.

From his perspective at the time, he was getting almost $1m, which he might
not get otherwise.

Furthermore, the reason for the stock going down in the first place was HIS
fault. He was the CIO. The information leak was directly on his shoulders.

~~~
esoterica
The restitution was exactly equal to the profit (and there was a fine imposed
on top of that). If he had made $1m instead of 117k then he would have been
made to pay back $1m. Your assertion that the restitution structure would have
allowed him to pay back less then the amount he profited by is nonsensical.

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aj7
This is why financial crimes above a certain value, say $2M, need to be
CAPITAL offenses. I know this sounds crude. To bankers, and other white-collar
types, cruel and unusual. But for these highly educated types, used to
calculating probabilities, we have to add the possible risk of unlimited loss.
For the already affluent possible scofflaw, this would act as a powerful
deterrent.

~~~
Gibbon1
I wouldn't go that far but I think minimum jail time of 1 day per $1000 would
be 'fair enough'. $2M would net you five and a half years in jail.

~~~
Zhenya
This is brilliant. Let the criminals do the math and figure out what their
time is worth. In this case 500k for 4 months is a joke.

