New York, June 29: An Indian software engineering manager, Sudhakar Reddy Bonthu, in the US has been charged with trading on confidential information he received while creating a website for consumers impacted by a data breach. Bonthu, an India citizen and a permanent resident of the US state of Georgia. The Securities and Exchange Commission (SEC) said Bonthu committed securities fraud by engaging in illegal insider trading in the securities of information solutions and human resources company Equifax. Also Read - Georgia Runoff: Democrats Win First County, Narrow Lead in Second; Control of Senate in Sight
Bonthu was an Equifax employee from September 2003 until March 2018. The SEC charged him with insider trading in advance of the company’s September 2017 announcement of a massive data breach that exposed Social Security numbers and other personal information of approximately 148 million US customers. Also Read - US Election Results: Recount in Georgia Confirms Biden as Winner, Makes Him 1st Democrat to Carry State in Nearly 3 Decades
This is the second case the SEC has filed arising from the Equifax data breach. In March, SEC had charged former chief information officer of a US business unit of Equifax Jun Ying with insider trading. Also Read - US Election Results 2020: As Joe Biden Inches Closer to Victory, Donald Trump Files Lawsuits in 3 States & Seeks Recount in Wisconsin
Beginning in September 2013, Bonthu was a Production Development Manager of Software Engineering in Equifax’s Global Consumer Solutions business unit. On March 12, 2018, his employment was terminated by Equifax and is currently unemployed.
In a complaint filed in federal court in Atlanta yesterday, the SEC charged that Bonthu traded on confidential information he received while creating a website for consumers impacted by a data breach.
According to the complaint, Bonthu was told the work was being done for an unnamed potential client, but based on information he received, he concluded that Equifax itself was the victim of the breach. The SEC alleges that Bonthu violated company policy when he traded on the non-public information by purchasing Equifax put options.
Less than a week later, after Equifax publicly announced the data breach and its stock declined nearly 14 per cent, Bonthu sold the put options and netted more than USD 75,000, a return of more than 3,500 per cent on his initial investment.
Bonthu was terminated from Equifax in March after refusing to cooperate with an internal investigation into whether he had violated the company’s insider trading policy.
“As we allege, Bonthu, who was entrusted with confidential information by his employer, misused that information to conclude that his company had suffered a massive data breach and then sought to illegally profit,” said Richard R Best, Director of the SEC’s Atlanta Regional Office.
“Corporate insiders simply cannot abuse their access to sensitive information and illegally enrich themselves,” Best said. In a parallel proceeding, the US Attorney’s Office for the Northern District of Georgia filed criminal charges against Bonthu. To settle the SEC’s civil charges, Bonthu has agreed to a permanent injunction and to return his allegedly ill-gotten gains plus interest. This settlement is subject to court approval.
This is published unedited from the PTI feed.