Privacy concerns, which had been a conceptual headache for Senator Patrick Leahy (D-VT) became personal on Friday when Bank of America announced that it had lost computer tapes containing personal information on 1.2 million government employees – including Leahy.
Leahy, who is the ranking Democrat on the Senate Judiciary Committee, was among the first members of congress to call for investigations into data compiling practices. It was Leahy’s letter to committee chair Arlen Specter (R-PA) that triggered the chairman to endorse hearings into compiler practices.
According to Reuters, Senator Charles Schumer (D-NY) was told that the tapes, which contain credit card records on more than 900,000 Department of Defense employees in addition to Leahy, were likely stolen by baggage handlers from a commercial plane. Schumer indicated his source for this information was the Senate Rules Committee, Reuters said. At deadline, Bank of America had not speculated how the tapes disappeared, but it had acknowledged that the tapes vanished in December as they were being shipped to a backup data center, according to Reuters.
Reuters further claimed that, according to Bank of America, an ongoing investigation had not turned up any evidence that the tapes had been accessed or used.
The Bank of America announcement followed a report stating that two top executives at ChoicePoint Inc. had heavily traded stock during the three-month period between when they privately learned that the company had sold names to scam artists and announced the security breach to the public, according to the Associated Press.
More than a week ago, ChoicePoint disclosed that it had not conducted background checks before selling nearly 145,000 consumer records to individuals who either used or planned to use the information for fraudulent purposes, the AP reported.
According to the AP, concern over the record was brought to ChoicePoint’s management in October 2004, but the Alpharetta, GA-based data compiling firm did not release this finding to the public until this year. The AP indicated that the lead investigator in the Los Angeles County Sheriff’s Department, where the claims were first investigated, told the firm not to announce its actions prior to late January, in order to avoid compromising the investigation.
But AP stories released late Friday of last week claim that Derek Smith, the company’s chief executive, and Douglas Curling, its president, realized profits of $16.6 million in stock transactions. The three-month period between the start of the investigation and ChoicePoint’s public announcement saw the two men make a total of eight transactions – purchases and sales – in contrast with the six the two men made during all of 2002 and 2003, according to the report from the AP.
According to the AP, ChoicePoint indicated that these trades were done as part of a series of pre-arranged plans that had been sanctioned by the company’s board. The AP noted that some of the transactions involved purchasing shares at prices lower than their current cost – including one in which the shares cost $3.62 each – and selling them for prices up to $46.82 per share. On Friday, the shares closed at $40.27.
The AP noted that the Securities and Exchange Commission declined to comment on whether ChoicePoint was the subject of an investigation.
