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The Recent Data Theft at ChoicePoint

ArsTechnica (watch out for their hideous new pop-=up ad -- just wait and it will time out) has an interesting story on the recent ChoicePoint data-theft scandal and how it's not the first time it has happened to that company... Hmmmm...

ChoicePoint no stranger to data theft
It turns out that the recent case of identity theft wasn't the first one for ChoicePoint, despite CEO Derek Smith's assertions to the contrary. It turns out that company screwed up in a nearly-identical fashion by selling consumer data to fraud artists a few years ago (but apparently did not report the incident to consumers who were affected by the scam). In the previous known incident, personal data on 7,000 consumers was sold to scammers who were convicted in 2002 after committing at least US$1 million in fraud using that misappropriated data. When asked by e-mail for comment on both the earlier case and the discrepancy between the CEO's statement and the events of a few years ago, the company declined, saying that they were "evaluating the situation" and would comment later.

And to add insult to injury:

In related news, the SEC has launched an informal insider trading inquiry into the sales of ChoicePoint stock by Smith and other executives, the timing of which may be connected with news of the data theft becoming public. That investigation is in addition to the FTC's inquiry into the company's compliance with consumer information security laws and possible Congressional hearings into the matter (and hopefully the larger question of the government's lack of regard for the protection of consumer data). At the very least, it looks like some well-earned hard times are ahead for the ChoicePoint. Hopefully some good will come out of the whole stinking mess for consumers.

Here is a graph of the last 30 days of ChoicePoint's stock prices (NYSE/CPS):
Click for full-size Image The public awareness started building on Monday February 21st. What was the big spike in stock transactions that previous Tuesday 15th? Looking at over two million shares changing hands with a share value of about $45 as opposed to the $38 it was a week later. Posted by DaveH at March 4, 2005 10:10 PM