Is it legal and ethical for executives to sell stock after learning about a data breach?

"Ethics Activity In late July 2017, senior management at Equifax, a U.S. credit-reporting company, discovered that hackers had stolen the personal data of more than 145 million U.S. customers, including names, birthdates, Social Cecurity numbers, and driver’s license information. In addition, the hackers stole credit card information for more than 200,000 Equifax customers. If that weren’t bad enough, reports soon surfaced that three top executives, including Equifax’s chief financial officer, sold close to $2 million in shares of company stock days after learning about the breach and more than a month before the company announced the data hack publicly. In a company statement, Equifax says the executives “had no knowledge that an intrusion had occurred at the time they sold their shares.” The day after the company’s announcement about the breach, Equifax’s stock dropped by double digits, and the Department of Justice opened a criminal investigation. Less than three weeks after the public announcement, Equifax announced its CEO, Richard Smith, would retire, taking a multimillion-dollar payout with him—even after shareholders lost more than $5 billion in stock value after the data breach was acknowledged. Ethical Dilemma: Is it legal for company executives to sell stock shares for financial gain when they know Chapter 16 Understanding Financial Management and Securities Markets 649"