Richard Smith, the former CEO of Equifax, came under fire from Congress barely minutes into his hearing on Tuesday before the House Energy Committee. Before Smith’s opening remarks, Rep. Ben Ray Lujan slammed him for his firm’s “disgraceful actions” adding that the American people need answers.
Richard Smith resigned last week from Equifax, a leading consumer data company, after a hacking incident thought to have exposed the personal data of nearly half of the U.S. population.
Answering to questions from the congressional committee, Smith said that he was deeply and truly sorry for what happened. However, the committee raised a number of key questions including Equifax’s failure to address important software vulnerabilities.
Rep. Joe Barton noted during the hearing that such hacking was not acceptable and that credit reporting agencies should be compelled to pay the consumers they serve in the event that they are hacked. Issues about the credit reporting industry were also raised by Rep. Jan Schakowsky who suggested that the industry had long remained under-regulated.
Equifax reported a huge breach of its data in September fearing that hackers had accessed important personal information about its consumers. Personal details such as names and social security numbers of about 143 million people in the US were affected by the hack.
The company noted that the credit card numbers of 209,000 Americans were also accessed. Equifax said that it had learned of the breach in late July although public disclosure on the incident was made in September.
There was a public backlash due to this delay with the company being criticized for failing to notify consumers immediately after the breach was first detected. The Federal Trade Commission has already started to investigate the hack with inquiries in the House and the Senate also expected to continue.
The CIO David Webb was also forced out as well as Susan Mauldin, the chief security officer at the time of the breach. The US Justice Department is reported to be investigating a number of Equifax officials in connection with the data breach who sold stocks just before the breach was made public.
Bloomberg noted that among those under investigation include the CFO John Gamble, the president of US information solutions Joseph Loughran, and Rodolfo Ploder, the president of workforce solutions at the company.
Securities and Exchange Commission filings show that the three senior officials dumped Equifax stocks worth $2 million just a few days after the company learned of the hack. However, a statement that was sent by Equifax noted that the three did not have any information about the hack before selling the stock.
SEC filings showed that executives at the company still owned thousands of Equifax shares even after the sale. Since reports of the data breach broke to the public, Equifax stocks have tumbled by nearly 24% and it’s not clear if this trajectory will be reversed anytime soon.