Equifax’s management blame game
Equifax (EFX) is now facing lawsuits from attorneys general in New York and Massachusetts, not to mention the ever-increasing consumer uproar. Although the company brought on FireEye’s (FEYE) Mandiant to investigate, rather than owning up to the responsibility and carelessness that exposed millions of customers, Equifax has chosen to blame an open-source software by the Apache Foundation.
After the breach, Equifax tried to rectify the situation by offering an olive branch and providing free monitoring services from its TrustedID Premier service to all its US customers, provided that they sign up by November 21, 2017.
However, considering the extent and significance of this data breach, which has impacted just about anyone with a credit history, Equifax’s free offering is a difficult pill to swallow. Immediately after the breach, Equifax announced that David Webb, Equifax’s CIO (chief information officer) and Susan Mauldin, Equifax’s chief security officer, would be retiring immediately.
The sell-off of nearly $2 million in Equifax stock by company’s executives in August garnered news that there was skepticism that the company’s executives learned of the data breach early and immediately acted upon this information before Equifax announced it to its investors and consumers.
However, the company denied this claim and said the executives were unaware of the breach at the time of their share sell-offs.
Markets punished Equifax
Equifax stock fell 15% on the day of announcement of the breach. Apart from market’s punishment, which was apparent in Equifax’s stock price, Standard & Poor’s revised its outlook on Equifax’s BBB-plus rated bonds from stable to negative.
Banks, financial institutions, and other lenders are now likely reconsidering their relationships with Equifax, while its competitors are likely to benefit from the loss.