By Jaikumar Vijayan
October 27, 2009
A federal judge's rejection of a proposed settlement by TD Ameritrade
Inc. in a data breach lawsuit marks the second time in recent months
that a court has weighed in on what it considers to be basic security
standards for protecting data.
U.S. District Court Judge Vaughn Walker in San Francisco yesterday
denied final approval of a settlement that had been proposed by TD
Ameritrade in May to settle claims stemming from a 2007 breach that
exposed more than 6 million customer records.
In arriving at his decision, Walker said the court didn't find the
proposed settlement to be "fair, reasonable or adequate." Rather than
benefiting those directly affected by the breach, Ameritrade's proposed
settlement was designed largely to benefit the company, Walker wrote in
his 13-page ruling.
In September 2007, Ameritrade announced that the names, addresses, phone
numbers and trading information of potentially all of its more than 6
million retail and institutional customers at that time had been
compromised by an intrusion into one of its databases. The stolen
information was later used to spam those customers.
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