Equifax CEO quits after massive hack

Sep 28, 2017, 00:15
Equifax CEO quits after massive hack

Credit reporting agency Equifax EFX, +0.91% said Tuesday its chairman and chief executive Richard Smith will retire, after a security breach at the company that potentially exposed about 143 million USA adults to identity theft.

Smith was already scheduled to testify at twin hearings in early October.

Equifax's almost six-week delay in notifying the public about the intrusion into its vast database of sensitive information - and the bungled handling of potential fixes - led to an outcry from consumers and lawmakers as well as state and federal investigations.

The lawsuit states that Equifax failed to "implement and maintain reasonable security procedures and practices", provide timely notice about the data breach to California consumers affected by the breach, and provide complete and clear information when the company did finally provide notice to consumers.

On the same day the lawsuit was filed, Equifax's CEO Richard Smith stepped down. Equifax said it will look both inside and outside the company for a permanent CEO. Smith will help assist in the transition as an unpaid consultant.

In a statement, Mark Feidler, a board member who has been appointed chairman, said: "The board remains deeply concerned about and totally focused on the cybersecurity incident. Speaking for everyone on the Board, I sincerely apologise". Equifax found that its consumer website had been breached on July 29; data had been exposed since mid-May.

The company also said Tuesday it has formed a special board committee to investigate the breach.

Smith's departure followed two other executive exits.

"A CEO walking out the door just days before he is to appear before Congress is an abdication of his responsibility", said Sen. Brian Schatz, D-Hawaii. It also included more than 200,000 credit card numbers and almost 200,000 other documents with personal identifying information.

"We are drafting a bill right now that would offer your protections in case one of these data breaches ever occurs again", he said in a video posted Monday. The three who sold shares, including Equifax's chief financial officer, are under scrutiny.

The lawsuit is seeking restitution for affected consumers in California who purchased credit monitoring services from Equifax before September 7, 2017. The attackers were able to make use of the CVE-2017-5638 vulnerability in the open-source Apache Struts framework that was patched by the Apache Struts project in March 2017.

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