He cashed out $1 million in shares not knowing if these shares would become near worthless shortly after selling them. Considering it was a $175k fine, he eliminated serious risk to his personal finances.
Many rational people would do what this CIO did given this minor fine and brief prison sentence.
He was CIO of one of the business units
(Equifax U.S. Information Solutions), not the whole company. That guy (Dave Webb) resigned after the breach, and Jun Ying was going to replace him.
It really depends on how precarious he thought his position was after the breach. If his career as an executive would not be significantly harmed by breach, trading 4 months in jail and 5 million+ future career earnings as an executive for a 500k payday is not something rational people do, IMHO.
Maybe I am overestimating what he earned in a year. Tried a quick search to figure out what % of his take home income this was.
I am not sure at what point I would start to consider 4 months in jail for insider trading “worth it” (again this was a plea deal, could’ve been higher).
If all your personal wealth is tied up in a single company’s stock then you obviously run a risk of losing it all. The solution to that is diversifying your portfolio, not insider trading.
Many rational people would do what this CIO did given this minor fine and brief prison sentence.