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Former Equifax manager pleads guilty to insider trading

ATLANTA - Sudhakar Reddy Bonthu, a former manager at Equifax, pleaded guilty today to a charge of insider trading based on his purchases of options ahead of Equifax’s public announcement of its data breach.

“Bonthu was privy to nonpublic information pertaining to Equifax’s data breach, and he violated the law when he used that knowledge to enrich himself,” said U.S. Attorney Byung J. “BJay” Pak. “Our office will continue investigate and prosecute those who take advantage of their positions for illegal gain.”

“Our message with this case is simple - company insiders must follow the same rules that govern regular investors, otherwise the public’s confidence in the stock market erodes,” said Murang Pak, Acting Special Agent in Charge of FBI Atlanta. “If they don’t, the FBI and its federal partners are determined to investigate them and hold them accountable.”

“Bonthu used confidential information to determine that his company had suffered a massive data breach and then violated company policy to illegally profit from it,” said Richard R. Best, Director of the Securities and Exchange Commission’s Atlanta Regional Office. “Corporate employees cannot take advantage of their access to sensitive information and unlawfully benefit from it.”

According to U.S. Attorney Pak, the charges, and other information presented in court: Equifax Inc. is a consumer credit reporting agency headquartered in Atlanta. During the summer of 2017, Equifax was the victim of a data breach, where hackers acquired names, Social Security numbers, birth dates, and addresses of over 145 million consumers.

Sudhakar Reddy Bonthu was a software development manager for Equifax’s Global Consumer Services team in August 2017. In that role, he was entrusted with information that resulted in him concluding that Equifax was the victim of a data breach. On August 25, 2017, Bonthu and other Equifax employees were asked to assist in responding to the breach, although he was not directly informed that Equifax had been breached. On August 25, 2017, Bonthu was informed that the target date for announcing the breach publicly was September 6, 2017. Around August 30, 2017, Bonthu learned that at least 100 million individuals’ information was exposed as part of the breach and that the data included names and Social Security numbers. The next day, Bonthu received an email related to his work on the breach with a file attached named “EFXDatabreach.postman_collection.” “EFX” is the stock ticker symbol for Equifax.

On September 1, 2017, Bonthu bought 86 put options in Equifax stock that expired on September 15, 2017. Those put options allowed him to profit if the value of Equifax stock dropped within that two-week period. Equifax publicly disclosed the data breach on September 7, 2017, and its stock fell the next day. Bonthu then exercised his put options, realizing a profit of more than $75,000.

Sudhakar Reddy Bonthu, 44, of Atlanta, Georgia is scheduled to be sentenced on October 18, 2018, at 2:00 p.m. before U.S. District Judge Amy Totenberg.

This case is being investigated by the Federal Bureau of Investigation, with assistance from the U.S. Securities and Exchange Commission.

Assistant U.S. Attorney Christopher J. Huber, Deputy Chief of the Complex Frauds Section, and Assistant U.S. Attorney Lynsey M. Barron are prosecuting the case.

https://www.justice.gov/usao-ndga/pr/former-equifax-manager-pleads-guilty-insider-trading

Prosecutors have declined to file charges against prominent Democratic donor Ed Buck in connection with the fatal overdose last summer of a 26-year-old man at Buck’s West Hollywood home, citing insufficient evidence, according to court records.

In a document dated Thursday, the Los Angeles County district attorney’s office said that the “admissible evidence is insufficient to prove beyond a reasonable doubt” that Buck gave Gemmel Moore drugs or is responsible for the man’s July 2017 death.

The document also cited an inadmissible search and seizure, but did not provide details.

Seymour Amster, an attorney representing Buck, said Thursday that the move was a “complete exoneration” for Buck. “Gemmel Moore’s death was a tragedy. It’s now clear that Ed Buck had nothing to do with it,” Amster said.

Los Angeles County coroner's officials had concluded that Moore died from an accidental methamphetamine overdose in Buck’s Laurel Avenue apartment, which was littered with drug paraphernalia. Paramedics found Moore naked on a mattress in the living room, the coroner’s report said.

They ruled Moore's death an accident, and an initial review by sheriff’s deputies found nothing suspicious. But in August 2017, homicide detectives launched a new investigation after Moore’s mother and friends questioned whether the drugs that killed him were self-administered.

A notebook found in Moore’s possession indicated he used drugs with someone whose name is redacted in the coroner’s report. The Times has reviewed pages of that journal, in which Moore purportedly wrote about using crystal methamphetamine.

“Ed Buck is the one to thank,” Moore appears to have written. “He gave me my first injection of chrystal [sic] meth.”

Moore's mother, LaTisha Nixon of Texas, had questioned whether Buck’s ties to elected officials and differences in race and class influenced the investigation. Buck, who is 63 and white, is a longtime political donor, onetime West Hollywood City Council candidate and a well-known figure in LGBTQ political circles. Moore, who was black, had been homeless and had worked as an escort.

Homicide investigators presented their case to prosecutors July 10. The district attorney’s office reviewed and rejected four charges: murder, voluntary manslaughter, and furnishing and possessing drugs.

https://www.latimes.com/local/lanow/la-me-ln-ed-buck-prosecutors-20180726-story.html

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