On July 15, 2015, Ashley Madison joined the list of companies that failed to safeguard their customers’ most sensitive information—such as their credit card numbers, addresses, emails and phone numbers.
And Ashley Madison had more reason than most to do this—as the notorious website for cheating wives and husbands.
After all, its database is a blackmailer’s dream-come-true. Yet apparently its owners didn’t care enough about the privacy of their customers to provide adequate security.
Like so many other companies hit by hackers, Ashley Madison sought to reassure its dangerously compromised customers:
“At this time, we have been able to secure our sites, and close the unauthorized access points. We are working with law enforcement agencies, which are investigating this criminal act.”
This statement gave new meaning to the phrase, “Closing the barn door after the cow has gotten out.”
Avid Life Media assured its customers that it had hired “one of the world’s top IT security teams” to work on the breach.
So why wasn’t this “top IT security team” hired at the outset?
On August 18, 2015, the hackers began releasing their pirated information.
Ashley Madison’s customers chose to put their private information on its computer system.
Those of Equifax, didn’t. Equifax collected this from credit card companies.
From Mid-May through July, 2017, Equifax was hacked. The breach was discovered on July 29.
But the company didn’t announce it until September 7, 2017.
As a result, the private data of nearly 150 million people was compromised.
On July 22, 2019, the Federal Trade Commission (FTC) announced that Equifax, one of the nation’s largest credit-reporting companies, would pay up to $700 million to settle with the FTC and consumers.
If approved by the federal district court Northern District of Georgia, the settlement will provide up to $425 million in monetary relief to consumers and a $100 million civil money penalty.
According to Karl A. Racine, attorney general for Washington, D.C., it’s the largest settlement ever for a data breach.
“Equifax failed to protect consumers’ information and failed to enact reasonable security measures under California’s data security laws,” California Attorney General Xavier Becerra said in a news conference.
“That left very important personal information exposed and allowed hackers to steal consumers’ names, Social Security numbers, their birth dates, their addresses and in some instances their driver’s license number and even credit related information.”
And for those who believe the private sector is inherently more efficient than the public one: On the week that Equifax agreed to pay $700 million for its massive 2017 data breach, Richard Smith, its disgraced former CEO, got some wonderful news:
- He was slated to receive as much as $19.6 million in stock bonuses since leaving the company.
- That’s roughly 1,000 times the $20,000 maximum payout that any financially damaged consumer can collect from Equifax.
- In addition, Equifax agreed to cover Smith’s medical bills for life, a benefit the company estimates is worth another $103,500.
- Equifax decided he deserved a $24 million pension.
- Smith got $50,000 in tax and financial planning services.
- His stock bonuses cover a period that includes the former executive’s performance in 2017.
When CBS News contacted Equifax on this development, the company refused to comment. Neither could Smith be reached.
There is a reason why these security breaches keep happening.
An October 22, 2014 “commentary” published in Forbes magazine raised the highly disturbing question: “Cybersecurity: Does Corporate America Really Care?”
And the answer is clearly: No.
Its author was John Hering, co-founder and executive director of Lookout, which bills itself as “the world leader in mobile security for consumers and enterprises alike.”
Click here: Cybersecurity: Does corporate America really care?
“One thing is clear,” wrote Hering. “CEOs need to put security on their strategic agendas alongside revenue growth and other issues given priority in boardrooms.”
Hering warned that “CEOs don’t seem to be making security a priority.” And he offered several reasons for this:
- The sheer number of data compromises.
- Relatively little consumer outcry.
- Almost no impact on the companies’ standing on Wall Street.
- Executives may consider such breaches part of the cost of doing business.
“There’s a short-term mindset and denial of convenience in board rooms,” wrote Hering.
“Top executives don’t realize their systems are vulnerable and don’t understand the risks. Sales figures and new products are top of mind; shoring up IT systems aren’t.”
There are three ways corporations can be forced to start behaving responsibly on this issue.
- Smart attorneys need to start filing class-action lawsuits against companies that refuse to take steps to protect their customers’ private information. There is a name for such behavior: Criminal negligence. And there are laws carrying serious penalties for it.
- There must be Federal legislation to ensure that multi-million-dollar fines are levied against such companies—and especially their CEOs—when such data breaches occur.
- The Justice Department should vigorously prosecute CEOs whose companies’ criminal negligence leads to such massive data breaches. They should be considered as accessories to crime, and, if convicted, sentenced to lengthy prison terms.
Only then will the CEO mindset of “We don’t care, we don’t have to” be replaced with: “We care, because we’ll lose our money and/or freedom if we don’t.”
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THE RICH (LIKE THE PLAGUE) ARE WITH YOU ALWAYS: PART ONE (OF TWO)
In Bureaucracy, Business, History, Politics, Social commentary on February 20, 2020 at 12:10 amAmericans are used to Presidential candidates telling lies (euphemistically known as “campaign promises”) to get elected.
But when a candidate actually (and usually accidentally) tells the truth, the results can be electrifying.
On June 18, 2019, Democratic Presidential candidate (and momentary front-runner) Joseph Biden addressed a roomful of donors in New York.
The former Vice President believed that his message would comfort his well-heeled audience of billionaires: Don’t worry, if I’m elected, your standard of living won’t change.
Addressing the 100 or so guests at a fundraiser at the Carlyle Hotel in New York City, Biden said that he had taken heat from “some of the people on my team, on the Democratic side” because he had said that rich people were “just as patriotic as poor people.
Joe Biden
“The truth of the matter is, you all, you all know, you all know in your gut what has to be done. We can disagree in the margins but the truth of the matter is it’s all within our wheelhouse and nobody has to be punished. No one’s standard of living will change, nothing would fundamentally change,” he said.
And he added: “I mean, we may not want to demonize anybody who has made money.
“When we have income inequality as large as we have in the United States today, it brews and ferments political discord and basic revolution. Not a joke. Not a joke … It allows demagogues to step in and say the reason where we are is because of the ‘other’….
“You’re not the other. I need you very badly. I hope if I win this nomination, I won’t let you down. I promise you. I have a bad reputation, I always say what I mean. The problem is I sometimes say all that I mean.”
Biden has talked about decreasing income inequality and promoting workers’ rights. But he’s taken a moderate stance when it comes to taxation.
United States Senator Bernie Sanders (D-VT), on the other hand, has attacked the ultra-rich as responsible for the ever-widening gap between themselves and the poor.
“I love Bernie, but I’m not Bernie Sanders. I don’t think 500 billionaires are the reason why we’re in trouble,” Biden said in March, 2019.
Instead, he proposes expanding tax credits for the poor and middle class, and making the tax code less friendly to rich investors.
Robert Payne, the distinguished British historian, took a different—and darker—view of the rich.
Payne authored more than 110 books. Among his subjects were Adolf Hitler, Ivan the Terrible, Winston Churchill, Joseph Stalin, Vladimir Lenin, William Shakespeare and Leon Trotsky.
In 1975, he published The Corrupt Society: From Ancient Greece to Present-Day America. It proved a summary of many of his previous works.
Among the epochs it covered: The civilizations of ancient Greece, Rome and China; Nazi Germany; the Soviet Union; and Watergate-era America. And the massive corruption each of those epochs had spawned.
In his chapter, “A View of the Uncorrupted Society,” Payne warned: Power and wealth are the main sources of corruption.
“The rich, simply by being rich, are infected with corruption. Their overwhelming desire is to grow richer, but they can do this only at the expense of those who are poorer than themselves.
”Their interests conflict with those of the overall society. They live sheltered from the constant anxieties of the poor, and thus cannot understand them. Nor do they try to.
They see the poor as alien from themselves, and thus come to fear and despise them. And their wealth and influence enables them to buy politicians—who, in turn, write legislation that protects the rich from the poor.
But Payne foresaw an even greater danger from the rich and powerful than their mere isolation from the rest of society: “The mere presence of the rich is corrupting. Their habits, their moral codes, their delight in conspicuous consumption are permanent affronts to the rest of humanity. Vast inequalities of wealth are intolerable in any decent society.”
Writing in 1975, Payne noted that a third of the private wealth was possessed by less than five percent of the population—while about a fifth of the populace lived at the poverty level. By 2000, he predicted, about five percent of the population would possess two-thirds of America’s wealth. And more than half the population would be near or below the starvation level.
The result could only be catastrophe. The only way to halt this this increasing concentration of wealth by fewer people would be through law or violent revolution.
Payne has proven to be an uncanny prophet.
On December 8, 2017, the Seattle Times noted that the wealthiest one percent of Americans owned 40% of the country’s wealth. They owned more wealth than the bottom 90% combined.
From 2013, the share of wealth owned by the one percent increased by nearly three percentage points. Wealth owned by the bottom 90%, meanwhile, fell over the same period.
But this situation need not remain permanent.
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