The news keeps flowing from everywhere but Heartland! Their 2008Breach.com site has not been updated since January.
- PC World: SEC, FTC Investigating Heartland After Data Theft.
- Seeking Alpha: Heartland Payment Systems, Q4 2008 Earnings Call Transcript.
- Bank Info Security: Heartland Data Breach: 500+ Institutions Affected: Related Phishing Scam Uncovered in Texas.
From the SEC article at PC World:
However, the investigation may relate to stock trades made by Heartland Chairman and CEO Robert Carr after Visa notified Heartland of suspicious activity on Oct. 28, 2008. According to insider trade filings, Carr sold just under US$8 million worth of stock between Oct. 29 and the day the breach was disclosed. Heartland's stock was trading in the $15-to-$20 range for most of these transactions, but it dropped following the breach disclosure. It closed Wednesday at $5.49.
During the conference call, Carr said that his trades were part of a 10b5-1 plan initiated in August -- months before Heartland knew of any problems -- to pay off his personal debt, and that he stopped selling shares as soon as the company discovered malicious software on its systems on the night of Jan. 12. "I had no discretion regarding the terms or timing of the sales," he said.
Carr sold just over 900,000 of his 5.8 million shares before pulling the plug on the 10b5-1 plan in January, Heartland said.
Wow …
And, to top it off, the company made the breach public on January 20, 2009. That was the day of President Obama’s inauguration. So, guess where the press’ attentions were?
While it is understandable that a business needs to keep their shareholder’s interests in mind when it comes to any kind of negative publicity, there needs to be a realization that the impact to the client/customer is more important than anything else. Period.
Ultimately, the client/customer walking away from that company will also have an impact on the company due to the breach of trust. And from there, that breach of trust has led to class action lawsuits being initiated with more to come.
In this case, the breach and the way the company and its management have been handling information about it has been, in our opinion, less than forthcoming.
Taking full responsibility for the devastating impact the breach has had on, we venture to estimate, millions of folks, including us, around the world would be a good step in the right direction.
Interestingly enough, Mr. Carr, Heartland’s CEO cited above, will be giving a presentation at the Goldman Sachs Technology Internet Conference today at 18:20hrs (6:20PM) Eastern (MSN Money Article):
A Webcast of the Heartland fourth quarter 2008 conference call can be found here along with the original link for the above Internet Web Cast:
We as a company hold our business highly accountable for everything that happens for and to our clients. If we mess up big time, to the point where the only option is losing our business, then so be it. We will take full responsibility for our error and do everything we can to make reparations for that error.
Our clients should not have to rely on lawyers and the courts for restitution if something drastic ever happened. It is a point of principle.
Philip Elder
MPECS Inc.
Microsoft Small Business Specialists
*All Mac on SBS posts will not be written on a Mac until we replace our now missing iMac!
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