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SEC, FTC Investigating Heartland After Data Theft

SEC, FTC Investigating Heartland After Data Theft
SEC, FTC Investigating Heartland After Data Theft 

By Robert McMillan
IDG News Service
February 25, 2009

Federal agencies, including the U.S. Federal Trade Commission and the 
U.S. Securities and Exchange Commission, have begun investigating 
Heartland Payment Systems following a massive data breach at the payment 
processing company.

Company President and Chief Financial Officer Robert Baldwin Jr. 
disclosed the investigations during Heartland's quarterly conference 
call with investigators Tuesday, saying that the SEC had launched an 
informal inquiry into the company and that there is also a related 
investigation by the Department of Justice. The U.S. Department of the 
Treasury's Office of the Comptroller of the Currency (OCC), which 
regulates national banks and their service providers, has launched an 
inquiry, as has the FTC, he said.

Heartland has also been hit with a class-action lawsuit relating to the 
breach, which was publicly disclosed on Jan. 20. "We may, in the future, 
be subjected to other governmental inquiries and investigations," 
Baldwin said during the call. "We intend to vigorously defend any claims 
asserted against us."

Hackers were able to break into Heartland's systems and collect 
unencrypted data on payment card transactions that the company processed 
on behalf of its merchant clients. Merchants at about 250,000 locations, 
including retail stores, gas stations and hotels, use Heartland's 
services. Heartland does not know how long the hackers were able to 
steal credit card information or how many cards were affected.


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