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Hack Will Lead to Little, if Any, Punishment for Equifax
From: "Dave Farber" <farber () gmail com>
Date: Thu, 21 Sep 2017 03:20:26 -0400
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From: DV Henkel-Wallace <gumby () henkel-wallace org> Date: September 21, 2017 at 1:43:04 AM EDT To: David Farber <dave () farber net> Subject: Hack Will Lead to Little, if Any, Punishment for Equifax As I have said, zero customer data was lost in the Equifax breech, so under the law it appears no harm was done, or at least no actionable harm. https://www.nytimes.com/2017/09/20/business/equifax-hack-penalties.html It’s a bad week when one senator says that “somebody needs to go to jail” for selling shares in your company before it disclosed a massive data breach, and another asserts that the episode was “one of the most egregious examples of corporate malfeasances since Enron.” The hacking into Equifax’s trove of consumer and financial data that exposed the sensitive personal information of as many as 143 million Americans leads naturally to the question of the legal consequences the company and its executives might face. The answer, for those who remember the government’s response to the financial crisis, will be as familiar as it is unwelcome: not much. That seems outrageous when so many individuals may see their identities stolen because of a company’s failure to ensure the safety of its primary product. But Equifax operates in a sphere with minimal government regulation, and its conduct is unlikely to trigger a criminal prosecution of the company or any of its executives. The worst anyone connected with Equifax may end up facing is a tongue-lashing from Congress — many hearings are already scheduled — except for the outside chance that the aggrieved public gets its own day in court. But that could be years from now. Unlike the banks that packaged and sold risky securities and derivatives, leading to the meltdown in the financial markets nine years ago, Equifax is a victim, not a perpetrator. Frustrating as it may be in this case, we usually don’t blame the victim of a theft for allowing it to happen — even if you go into a bad neighborhood late at night. And the usual tools that federal prosecutors use to go after companies for misconduct — most notably the mail fraud and wire fraud statutes — do not apply because Equifax did not actively mislead anyone about the hacking.
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- Hack Will Lead to Little, if Any, Punishment for Equifax Dave Farber (Sep 21)