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The House Financial Services Committee is seeking information about trading in Equifax options nearly three weeks before the credit reporting company disclosed a massive data breach, a source familiar with the inquiry told CNBC.
A lawyer for the committee has reached out to traders, looking for a possible explanation for the spike in options trading on Aug. 21, weeks after Equifax discovered the breach internally in late July but before it publicly disclosed it.
News of the breach, which compromised personal information for up to 143 million people, has sliced more than 34 percent off Equifax's share price this month.
On Wednesday afternoon, Federal Reserve Chairman Janet Yellen said it was "a very serious" data breach. "We would really urge consumers now to be careful in monitoring their credit reports and financial situation."
Yellen added, "We're working with the banks to supervise, to make sure, to take appropriate actions with respect to their business processes."
The trading in Equifax options in August was unusual given how lightly they trade normally. And the size of the trade could have generated millions in profit.
On Aug. 21, 10 times as many Equifax options were bought than in the entire month of July. On that day, 2,600 contracts, representing the right to sell 260,000 shares of Equifax at $135 each in September, were bought for 60 cents to 70 cents each. At the time, Equifax shares traded around $140.
The lawyer for the committee, which is chaired by Rep. Jeb Hensarling, R-Texas, has asked whether that size of trade is normal, where the options traded, and what types of traders would be active in the type of transaction in question, according to the source familiar with the inquiry.
The options would pay if Equifax shares fell below $135 in September, which is exactly what happened. Once the breach was disclosed on Sept. 7, the shares sank. At Tuesday's $93.47 closing price, the profit on the options trade would be more than $10 million.
The number of inquiries and formal investigations into Equifax and its handling of the breach and its disclosure continue to mount. On Tuesday, Massachusetts filed a lawsuit saying Equifax didn't properly protect the consumer data under its control, and several other states continue to investigate. The Federal Trade Commission has also confirmed it is investigating.
Federal prosecutors in Atlanta, where Equifax is based, are also looking into the matter. "The U.S. Attorney's Office for the Northern District of Georgia is working with the FBI to conduct a criminal investigation into the Equifax breach and resulting theft of personal information," said U.S. Attorney John Horn in a statement. The office wouldn't comment further.
In addition to the data breach itself, stock sales by three Equifax executives have come under scrutiny. The executives, including Equifax's chief financial officer, sold $1.8 million of stock just days after the breach was detected internally, though a spokesperson for Equifax has said they weren't aware of the incident at the time of the sales.
The Senate Finance Committee has already asked for additional information from Equifax about the breach and the timing of the insider stock sales.