Corporate

Corporate Data Breaches: Citigroup, Inc. [updated]

by: Kyouri

In the latest hit to the string of corporate security breaches, Citigroup Inc., who received a $45 billion bailout in 2008 during what has become the largest banking industry bailout in U.S. history, and who also had the federal government shoulder hundreds of billions of dollars worth of bad assets, has become a target of hackers (1).

Who these hackers are, or even if they are related to the recent hits on corporate giants such as Sony Playstation in April,  and Lockheed Martin in May of this year, or not, is still unknown to the public at large. What has been said is that these security breaches involve accessing sensitive account information of millions of Americans.

Notwithstanding the individual’s financial security and the risks taken when entering such sensitive data in an online manner where hackers thrive, the biggest questions are:

1) Why are hackers doing this? Besides the alleged enjoyment they may gain in being able to do this “just because they can”, what is in it for them?

2) Given the recent assignment of a new Internet Czar by the Obama administration, is this a sign that the also recent allegations of al-Quaeda hitting the U.S. with a “cyber war” means these attacks were pre-ordained through information not released to the public by terrorists?

3) Is this fodder for conspiracy theorists to assume these attacks are designed as yet another means for the government to take control of our internet either for,

  • the sole purpose of social control,
  • media / information control, or
  • some corporate profit?

In the end, all these attacks are requiring that consumers be more vigilant and take costly precautions to protect, or regain, their financial security.

Each American receives one free credit report from each of the three major credit reporting companies – Equifax, Experian, and Trans Union – a year. With the new wave of security breaches infiltrating private consumer account information, the consumer who has had their information hacked into must now obtain another credit report in order to ensure their credit integrity, at a cost. If false information has shown up, the consumer must try to correct the information then obtain yet another copy, again at a cost, of their credit report to verify the corrections have been made. And this must done with all three credit reporting bureaus.

As an aside, in the first quarter 2011, Equifax had a $190,000 expense relating to lobbying activities, according to their lobbying report. Experian had an income of $40,000 related to their lobbying activities, while Tran Union had an income of $10,000 in the same period.

In March of this year Citigroup announced that it would have a stock-split affective in May 2011. According to Problem Bank List, “The initial results of the reverse split are not encouraging.  Since the reverse stock split took effect, Citigroup has declined by $5.55 or 12.7%, resulting in a loss to shareholders of $16.2 billion.” (2) This comes on the heels of the U.S. selling a huge chunk of its shares back to private individuals in December 2010 for a profit of $12 billion. (3) And one month after the failing stock split and huge loss to shareholders, Citigroup Inc.’s security is breached.

UPDATE (June 11, 2011):

The group known as ‘Anonymous’ has been arrested for their alleged hacking of Sony Corp. in April. According to SmartHouse, other targets from this group allegedly include “two large Spanish banks and Italian energy company Enel SpA, as well as sites belonging to the governments of Egypt, Libya and Iran and other countries, police said.” (4)

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(1) AP: “Latest Data Breach Strikes at Financial Security” – http://news.yahoo.com/s/ap/20110610/ap_on_hi_te/us_citigroup_data_breach

(2) Problem Bank List: “Citigroup Shareholders Lose $16 Billion After Reverse Stock Split” – http://problembanklist.com/citigroup-shareholders-lose-billion-after-reverse-stock-split-0358/

(3) Washington Post: “Government sells remaining shares in Citigroup; investment to net $12 billion total profit for taxpayers” – http://www.washingtonpost.com/wp-dyn/content/article/2010/12/07/AR2010120700091.html

(4) SmartHouse: “Sony Playstation Hackers Caught” – http://smarthouse.com.au/Gaming/Industry/N9C8F6S9

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