(Bloomberg) -- Equifax Inc.'s former Chief Executive Officer Richard Smith drew wrath from lawmakers on both sides of the aisle over stock sales initiated by three of his former deputies just days after the company learned of a potential hack.
Senators Jon Tester, a Democrat from Montana, and Tim Scott, a South Carolina Republican, pummeled Smith with questions Tuesday about what executives knew when they sold stock worth almost $1.8 million soon after the problem was discovered. The breach exposed sensitive consumer information for about 145 million Americans, the firm later said.
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“What y'all want us to believe is that the three luckiest investors who sold their stock did so without any knowledge that the suspicious activity may be bigger and more powerful than any other suspicious activity, perhaps in the history of the company,” Scott said during the Senate Banking Committee hearing. “I find that hard to believe.”
The trades, which were first reported by Bloomberg, involve Equifax Chief Financial Officer John Gamble, U.S. Information Solutions President Joseph Loughran and Rodolfo Ploder, president of Workforce Solutions.
Smith called the three men “honorable," and said the company allows executives to sell stock during a brief window after it finishes reporting earnings, which it last did on July 27. The three executives' sales were approved by the firm's chief legal officer, John Kelley, who also wasn't aware of the breach when he approved the sales, said Smith, who stepped down as CEO last month in the wake of an uproar over the hack.
“These are three men I've known for a long time,” Smith said. “They did follow the protocol. They got the clearance. The general counsel approved that sale.”
To contact the reporters on this story: Jenny Surane in New York at jsurane4@bloomberg.net, Elizabeth Dexheimer in Washington at edexheimer@bloomberg.net.
To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Steven Crabill, Steve Dickson
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