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Hacked Companies Facing Fines

Monday, October 12th, 2015 by | Filed Under: Quick Tips, Security Help

The government is cracking down on companies with poor cyber-security. So, if you have one of those businesses that’s still hanging on to Windows XP, you need to listen up.  If your data is breached, you could face a stiff fine for not having up-to-date security measures. You’ll still be in trouble even if none of your customers’ information is stolen.


Both the Federal Trade Commission and the Securities and Exchange Commission are showing decreasing tolerance for poor security measures. A St. Louis-based investment firm agreed to settle charges that the company failed to established required security procedures.  Among the charges, the company had no written policies and procedures to ensure confidentiality.

An unknown attacker , eventually traced to China, managed to get access to their server. While no customers suffered financial loss and the firm notified customers of the breach and provided identify theft protection for those affected, it wasn’t enough for the SEC.

The company was censured and ordered to pay a $75,000 penalty.

~ Cynthia


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19 Responses to “Hacked Companies Facing Fines”

  1. Allan Bell says:

    Yes, companies should be fined for not keeping their OS and security software up to date. If my personal info got out I’d consider filing a law suit against the company myself for allowing it to happen

  2. Caroline says:

    There is no excuse for any company in this day and age to NOT have security measures in place right from the start. This type of behavior is inexcusable.

  3. Richard Hendrix says:

    I think it is reprehensible that the Government is so ready to fine people for violations when no damage is done to anyone. Even when damage occurs, the only ones to profit is the Government. I believe that if a Company causes damage to a customer, the customer should be re-imbursed. Only if they are guilty of false advertising as to their security should a fine be considered, and then the company should be forced to publicize it.

  4. Kenneth Beard says:

    Yes, I think it is appropriate for the companies to be fined if their computer security is not up-to-date. The companies have a responsibility to keep customers’ info secure. If a company’s computer security measures are up-to-date and their computer is still hacked, then I do not believe the company should be fined. There are some genius hackers who can still breach computer security systems.

  5. J.myers says:

    You are claiming that the federal government is going to punish business’ for not updating their computers beyond “Windows XP”? Hadn’t the fed best clean up their own act before getting down on us? Now maybe I fell asleep along the last few months (If I did, I apologize) but when did the feds themselves do their updates for all military, WH, Pentagon, Etc?

    • cynthia says:

      To be clear, they’ll be punished financially if they’re hacked and can’t show they did everything necessary to prevent it. Not updating XP would be an example of not taking all the necessary security measures, as XP can’t be fully protected.

      • Artie Sanders says:

        Cynthia: You usually respond right on target, but I think you missed the boat on your reply to jMyers here. The guilty lax/neglectful government agenies are not “PUNISHED financially” because we the taxpayers are directly paying for their stupidity as usual.

      • Shanker says:

        Hi Cynthia,

        You better be careful about being insistent on updating WIN XP for security. Because, it gives an impression that you are an all out supporter of MS – though you might not be. It would be helpful if you add that ‘move over to a suitable replacement such as Linux OS,…

        • cynthia says:

          I am not a supporter in particular of any operating system. But if you’re running Windows XP for your businesses and it connects online in any way, you need to switch to something else that offers appropriate security support.

  6. Dave R says:

    It’s ironic the government would fine companies since they seem to be the biggest offender of using outdated software that gets hacked all the time. While I agree all companies SHOULD do everything they can to protect customers’ information, the largest damage has come from hacking the government servers. How about they lead by example?

  7. NickT says:

    I do not agree with the Government in these method to raise revenue. They should however make it very public that this company is not protecting their
    clients. Perhaps negative public reaction with damage the company more significantly than any fine.

  8. NickT says:

    I do not agree with the Government in these method to raise revenue. They should however make it very public that this company is not protecting their
    clients. Perhaps negative public reaction will damage the company more significantly than any fine.

  9. Richard Korte says:

    Agree with Mr.Hendrix, also if they are going after businesses then they better check their own back yard as the US navy is still using XP and paying millions of our taxpayers dollars to Microsoft for support.

  10. Calvin says:

    Get your nose out of everyone’s business big government!

  11. Bob Curry says:

    There’s a lot of difference between a private home and customers info as far as privacy is concerned. These companies have been entrusted with customers security as far as personal information is concerned. They have violated that trust. They should pay.

  12. Bob says:

    I don’t care how good a security system is, there will be a hacker that can beat it. a saying is that any security system that man creates, man can break into it. there is no such thing as a hack proof system

  13. Tony Hartford says:

    So the victim is responsible? If a company cannot protect their customers, they will lose their customers. And perhaps, if they have violated their customers trust, the customers can take them to court. The article doesn’t say but I suspect the collected fine will NOT be distributed among the customers. It will be absorbed by the government agency instead. And why are they not going after the hackers?

  14. Roxy R says:

    I agree with the regulation/law. But I also agree that our government – all parts/divisions should also be included in the law. The percentage of government offices that are still running XP is probably more than the general population percentage. If they are hacked that $75000 should immediately be deducted from their budget. And all of these fines should go to a special fund to help folks become “internet” literate, not into a general, government, slush fund. Any hack that puts a persons identity at risk, and/or could lead to financial harm should be included in those that can be fined. And, I believe it should be a “scaled” fine – the larger the company the more the fine. $75000 is pocket change to a large firm like GE, etc. Corporate fines are ridiculous unless they “hurt”!!!!!

  15. Karen says:

    NO…. companies should not be held accountable for acts of criminals. And if anyone should be held accountable it should be the companies that keep changing the OS’s and forcing companies to pay a fortune to upgrade. When they are running on a shoe string already. You should check out the cost of these businesses have to pay to upgrade and what their REAL net income is. Scary

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