Former Indian Equifax manager in US sentenced to 8 months home confinement for insider trading
New York, Oct 17 (PTI) An Indian software engineer who was charged with insider trading related to Equifax's massive data breach in 2017 has been sentenced to eight months of home confinement and fined USD 50,000 after pleading guilty.
Sudhakar Reddy Bonthu was also ordered to forfeit USD 75,979, the US Justice Department said.
The US Attorney's Office Northern District of Georgia in a statement Tuesday said Bonthu, 44, was sentenced to eight months of home confinement by US District Court Judge Amy Totenberg.
"Bonthu intentionally took advantage of information entrusted to him in order to make a quick profit," said US Attorney Byung J Pak in a statement.
He said that the integrity of the stock markets and the confidence of investors are impaired by those who use nonpublic information for personal gain.
Chris Hacker, the special agent of FBI Atlanta said that it will do everything to hold accountable those who choose to take advantage of their inside knowledge.
"If we don't hold company insiders to the same rules that govern regular investors, the public's confidence in the stock market erodes.The FBI will do everything in its power to hold accountable those who choose to take advantage of their inside knowledge," Hacker said.
Bonthu was an Equifax employee from September 2003 until March 2018. The Securities and Exchange Commission (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.
The SEC said Bonthu, a citizen of India and a permanent resident of the US state of Georgia, committed securities fraud by engaging in illegal insider trading in the securities of information solutions and human resources company Equifax Inc.
On 12 March 2018, Bonthu's employment was terminated by Equifax and is currently unemployed.
In June, 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 had alleged 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.
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. He has pleaded guilty and his case is pending.
Bonthu's wife, addressing the judge during the sentencing hearing, questioned why her husband was being punished when top executives were not.
"He's just a small fish in this whole game," Rekha Vummadi said.
Bonthu also addressed the judge, saying he accepted responsibility for his actions and that he was sorry to Equifax stakeholders and to his family.
According to the Associated Press, Bonthu faces possible deportation as a result of his felony conviction. PTI RUP
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