The Securities and Exchange Commission has charged three people with illegally tipping and trading in the securities of Equifax in advance of the firm's announcement about a massive 2017 data breach.
In September 2017 Equifax publicly announced it had suffered a data breach which affected around 148 million US customers, sending the company's stock price tumbling by nearly 20%.
The month before, the firm engaged a Chicago-based public relations firm to help with the incoming fallout.
According to the SEC complaint, Ann Dishinger, who worked as a finance manager at the PR firm, learned about the breach through her position and tipped her significant other, Lawrence Palmer.
Palmer is accused of contacting a former business client and arranging for them to purchase out-of-the-money Equifax put options in the client's brokerage account with the understanding that the pair would spilt any profits.
Palmer later reimbursed the client for the purchase cost of the options with a cheque, writing in the memo line "Blue Horseshoe", which the SEC says is an apparent reference to coded language used to convey inside information in the movie Wall Street.
In addition, Palmer is accused of tipping his brother and business partner Jerrold Palmer, who then pulled the same put options move with a friend.
The illegal trading netted approximately $35,000 and $73,000 in profits, respectively, says the complaint.
The brothers, without admitting or denying the allegations, have consented to a judgement that requires them to pay civil penalties. The litigation as to Dishinger remains pending.
This is the third set of insider trading charges filed by the SEC relating to the Equifax breach. In 2018, it charged two former Equifax employees - a chief information officer and a software engineering manager.