There are at least two things that happen when your company becomes the victim of one of the largest-ever hacks in history. The first is that some people within said company—although not the ones you might think, on account of the almost inexplicable fact that they didn’t know about it in spite of their senior statuses—will quickly dump their shares to avoid the inevitable hit those shares will take once the hack becomes public knowledge. The second, of course, is that the company hires at least one crisis management or public relations firm to hold its hand through the nasty fallout to come from it. Then, and only then, does a company so situated actually acknowledge the disaster.
This is pretty much how things played out for Equifax after the 2017 breach that gave hackers information on basically half of America. But there’s something else that happened in between steps two and three, and that is that someone at the PR firm allegedly had the same thought as Equifax’s CIO, but in reverse.
Ann Dishinger, who worked as a finance manager at the public relations firm, learned about the Equifax breach through her role and tipped her significant other, Lawrence Palmer, with the non-public news.
The SEC alleges that Palmer then contacted a former client who arranged for the purchase of out-of-the-money Equifax put options with the understanding that the client and Palmer would split any trading profits obtained.
The agency also alleges that Palmer tipped his brother and business partner, Jerrold Palmer, who then contacted a high school friend who arranged for the purchase of the same series of out-of-the-money Equifax put options.
That’s certainly one way to turn a profit from a hack. Here’s another, somewhat more active and creative one:
The defendants used dozens of hijacked accounts to bid up shares of a cannabis stock and a gaming stock; then they forced the commandeered accounts to purchase shares controlled by the group, said the civil action filed by the SEC in an Atlanta federal district court.
Alas, that’s the sort of thing that’s probably outside of the ken of a flack finance manager.
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