Equifax (NYSE:EFX) continues to rack up more problems as a former company executive has been charged with securities fraud following allegations of insider trading during the company’s data breach scandal.
The consumer credit reporting agency’s former employee Sudhakar Reddy Bonthu pleaded not guilty to charges of securities fraud at a federal courthouse in Atlanta Thursday. Court documents reveal that the former software development manager at the Atlanta-based company is being accused by the U.S. government of using non-public, insider knowledge of the Equifax data breach to make a profit of more than $75,000 off of trades made in September 2017.
The charges Bonthu faces could lead to a prison sentence of up to 20 years, as well as a fine of up to $5 million. The judge ordered that the parties should reconvene for another plea hearing, which means that the former Equifax executive has the option of changing his plea then.
The data breach struck the credit reporting agency in September of 2017 as Equifax was hacked by a party that has not been revealed. The hackers tapped into the company’s servers and gained private information on 145 million American consumers, including their Social Security numbers.
The federal government’s allegations claim that before Equifax publicly announced the breach, Bonthu was aware of the data exposure and bought 86 put options in Equifax stock, which allows the owner to make money if the company’s stock price falls.
EFX stock gained about 2.6% on Thursday despite the news.