If the defending company agrees to pay fines, implement corporate reforms, and fully cooperate with the investigation, the case might be settled using a DPA. In corporate cases, prosecutors are increasingly using deferred prosecution agreements (DPA) as a voluntary alternative to adjudication. Fines and clawbacks with no serious legal consequences serve as mere condemnation and not as a deterrence to inhibit recurring bad executive behavior. They may also face compensation clawbacks, without possibly any criminal charges. Equifax executives who sold their stocks, after the intrusion but before the public announcement, may face insider stock trading charges, but will probably escape severe consequences for their recklessness in executing their fiduciary responsibilities which resulted in damages to millions of customers. Probably no one is surprised? Considering not many corporate executives face harsh legal consequences for their mismanagement conducts. When faced with crises, most executives and boards increasingly put their hands up in the air and say, “How should I know?”Įven though Equifax executives have shown incompetence and foot-dragging in protecting sensitive data, it is unlikely anyone will face criminal charges. City Councilmember Steve Madison, left, before the Digital Commerce and Consumer Protection Subcommittee of the House Commerce Committee on Capitol Hill, Tuesday, Oct. Chambliss, R-Ga., right, and Pasadena, Calif. Not only that, the website, which the company set up in response to address questions and offer free credit monitoring for the millions of affected consumers, was itself riddled with vulnerabilities.įormer chairman and CEO of Equifax, Richard F. Instead of keeping its customers and investors in the dark, the company should have immediately alerted and begun advising them on safeguarding procedures. The most egregious part of this mess is the company’s five-week foot-dragging before publically announcing the breach. Credit reporting agency Equifax announced last month that hackers breached into the accounts of 143 million customers, gaining access to sensitive non-public information including social security and driver’s license numbers. Here we go again another corporate scandal. stock funds, investors added the most money since June during the past week, as the Trump administration plotted strategy for pushing a tax overhaul and the S&P 500 rose to a record. signage on the floor of the New York Stock Exchange (NYSE) in New.
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