Equifax is a company that had one job. The company failed, and now it must die. Here’s why.
This July 21, 2012, photo shows Equifax Inc., offices in Atlanta. Credit monitoring company Equifax says a breach exposed social security numbers and other data from about 143 million Americans. The Atlanta-based company said Thursday, Sept. 7, 2017, that “criminals” exploited a U.S. website application to access files between mid-May and July of this year. (AP Photo/Mike Stewart)
Equifax is known for being a “Credit Bureau.” That means that their job is to gather and be a central repository of information about debtors in America. When a creditor wants to evaluate whether to give you a loan or a line of credit, they ask a firm like Equifax to rate you. The creditor then feeds back information into Equifax after making the loan.
So it is true that Equifax had one job. Their one job was to be a good steward of information about you. And they have failed miserably in that. I say that not just because they were hacked. Hacks happen. I say this because the executives of the firm, collectively, conspired to protect themselves before giving notice to us about the information they mismanaged.
Three Equifax executives sold shares of the credit-reporting company worth nearly $2 million shortly after a massive data breach was discovered. The sales occurred before the company announced the breach to the public on Thursday.
While it is true that $2 million out of Equifax’s then-$17.5 billion market cap is no huge amount, given that the company has lost about 15% of its value because of the hack, this means these executives netted themselves $300,000 as a result of this form of insider trading. That amount may yet increase if the market continues to punish them, or react to possible criminal or regulatory action going forward. I can’t tell you whether this was illegal insider trading, but it certainly was a textbook case of executives trading on non-public information.
Add to this the sneaky, adversarial stunt pulled by Equifax, in which they tried to get worried customers to waive their right to sue in exchange for simple information about their security. We see a company gone rogue.
This tells us the nature of the leadership at Equifax, and what kind of company is being run there. This act of insider trading suggests that the leaders of Equifax neither cared about the general public whose information they were entrusted with, nor with the well-being of the shareholders who had entrusted them with the company. Equifax has become a corrupt organization.
As a result, as a matter of public policy, we should seek to have the corporation liquidated. It has valuable assets. Auction them off. Take the company apart and sell it. Equifax has divisions and subsidiaries. Put them on the block as well. In a free market, and an open society, we cannot tolerate this kind of combined failure and malfeasance to stand unpunished.
We as a society have done this before. Enron was entirely run out of business, and in fact had over twice as many employees as Equifax does. We need to make Equifax the next Enron.