After a long search in the wake of its massive security breach revealed last September, Equifax has named a new permanent leader. Mark Begor, who most recently has been a managing director at private equity company Warburg Pincus and a board member of FICO, will become CEO April 16. He is a 35-year veteran of executive suites in General Electric’s diverse enterprises.
Begor, 59, succeeds interim CEO Paulino do Rego Barros, Jr., who will assist in the transition before retiring in 2019. Barros replaced Richard Smith, who retired last fall “with a pay day worth up to $90 million. That departure was hastened by a speech he gave after the breach saying security issues were his biggest concern — after the database had been hacked,” as Fortune's Chris Morris recounts.
Smith wasn’t the only casualty of what has blossomed into a series of probes and legal actions examining gaffes by the Atlanta-based company.
“Equifax has been shuffling its top managers after disclosing last year that hackers were able to access the personal data of 145.5 million U.S. consumers. The firm also replaced its chief information and chief security officers in the wake of the breach, which has sparked more than 240 class actions and more than 60 regulatory or governmental inquiries,” Bloomberg’s Jennifer Surane writes.
“A national class-action lawsuit proceeding in federal court in Atlanta alleges that identity thieves are using information stolen through the cyber breach to apply for mortgages and credit cards, take out loans and gain access to bank accounts,” Kevin McCoy reminds us in USA Today.
“Arguing that Equifax ‘failed spectacularly’ in its duty to safeguard consumers' personal data, one of the more than 200 legal actions consolidated in the class-action lawsuit charged that the company's ‘misfeasance has allowed thieves to steal the valuable personal identification and financial information … for nearly half of the United States’ population.’”
“Equifax has also come under renewed congressional scrutiny in recent weeks after the revelation that additional consumer information beyond what was previously publicly disclosed was also compromised in the breach,” AnnaMaria Andriotis reports for the Wall Street Journal. “Then, in March, a former technology executive of the firm was indicted on criminal insider-trading charges regarding allegations he sold company stock after learning about the breach last year before it was made public. Equifax wasn’t accused of wrongdoing in the matter and the executive, Jun Ying, has pleaded not guilty to the charges.”
Also, “in January, an app it released that was meant to let people lock their credit files was riddled with glitches,” Stacy Cowley writes for the New York Times.
In an interview, “Begor said he believed his previous experience working at GE — which deals with both businesses and consumers — would help him in the [new] role. Equifax is still dealing with the aftereffects of the breach. A total of about 147.9 million Americans have been impacted by Equifax’s data breach, which remains the largest exposure of personal information in history, and the company is under numerous state and federal investigations as well as dozens of class-action lawsuits,” writes the AP’s Ken Sweet.
“We didn’t have the right defenses in place, but we are investing in the business to protect this from ever happening again,” Begor tells Sweet. “We are a public trust in many regards and we need to work to earn that trust back.”
At Warburg Pincus, Begor focused on operational improvements across portfolio companies within the firm's Industrial and Business Services group, according to the Equifax news release about his appointment. At GE, where he worked for 35 years, “Begor served in a variety of roles leading multibillion-dollar business units of the company, including CEO of GE Energy Management from 2014 to 2016, CEO of GE Capital Real Estate from 2011 to 2014, and CEO of GE Capital Retail Finance (Synchrony Financial) from 2002 to 2011.
In an interview with the WSJ’s Andriotis, Begor “touted his experience turning around two embattled GE divisions as preparing him for the new role.” And he “said his top priorities will include regaining customers’ and the public’s trust and improving the company’s data security. Another top goal: maintain Equifax’s role in collecting consumer data — an activity that was scrutinized by lawmakers for what was perceived as the company’s overreach into consumers’ personal information.”
Privacy is a topic that will gather steam in coming months as, following the exposés of Cambridge Analytica's use of personal data to target political pitches, people catch on to what observers such as Douglas Rushkoff have been observing for years: they are the product of Facebook and other social media; not the customer.