Goodbye to the company that leaked millions of Social Security numbers – It declares bankruptcy

National Public Data, a Florida-based company, has recently filed for Chapter 11 bankruptcy following a significant data breach that exposed the Social Security numbers of millions of individuals. This filing was prompted by mounting lawsuits and legal actions related to the breach, which involved the theft of sensitive personal data, including 272 million Social Security numbers and 600 million phone numbers of U.S. residents. The breach has led to widespread legal and financial consequences for both National Public Data and its parent company, Jerico Pictures.

The impact of the National Public Data breach on Social Security

According to court records, National Public Data’s bankruptcy filing occurred last week as it faced increasing pressure from lawsuits demanding financial compensation. These legal actions are seeking damages due to the data breach, which has affected potentially hundreds of millions of individuals. The documents filed in court highlight that the company will likely have to inform a large number of those affected by the breach and offer them credit monitoring services. The company’s bankruptcy filing reveals an overwhelming number of people potentially impacted, underscoring the scale of the incident.

The breach, which took place in December, resulted from a hacker infiltrating National Public Data’s systems. The stolen information eventually ended up on a hacking forum, allowing the personal data of millions to circulate online. This not only escalated the company’s legal troubles but also drew the attention of regulatory bodies. More than 20 state attorneys general are now demanding civil penalties from National Public Data due to the breach. Furthermore, the U.S. Federal Trade Commission has launched an investigation into the company’s handling of the sensitive data. These actions come in addition to multiple class-action lawsuits that have been filed against Jerico Pictures, which is owned by Salvatore Verini.

In response to the increasing legal pressures, National Public Data acknowledged in its bankruptcy filing that it is unable to generate enough revenue to cover the potential liabilities stemming from the lawsuits and investigations. The company admits that it cannot defend itself against the ongoing legal actions while maintaining its business operations. The document reads: “The enterprise cannot generate sufficient revenue to address the extensive potential liabilities…defend the lawsuits and support the investigations.” Additionally, the company noted the damage to its reputation, which has resulted in a loss of customers and further impacted its ability to recover financially.

Chapter 11 bankruptcy is typically filed by companies looking to reorganize their business under court supervision. However, in this case, Jerico Pictures’ filing suggests that the company may not have the financial resources to cover its legal obligations, including attorney fees and potential penalties. Court documents reveal that National Public Data earned a net profit of just over $865,000 on revenues of $1.2 million in the past year, a figure that pales in comparison to the potential costs associated with the breach. For the year prior, the company made just under half a million dollars in net profit, highlighting its limited financial capacity.

Given these financial constraints, it seems that the primary goal of the bankruptcy filing is to manage the numerous lawsuits and investigations that have been brought against the company. As a result of the filing, the first class-action lawsuit against Jerico Pictures has been temporarily stayed by a Florida court. This delay gives the company some breathing room as it navigates the legal challenges ahead.

National Public Data had been offering background check services to its clients, which involved storing vast amounts of personal information on millions of Americans. Despite the company’s role in data aggregation, it appears that its security systems were not robust enough to protect this information from cyberattacks. The breach not only exposed the company to legal repercussions but also tarnished its reputation in the industry.

Although National Public Data recently updated its website, announcing that it is no longer selling personal data, the damage to its business and reputation has already been done. With lawsuits, investigations, and financial losses piling up, it remains to be seen how the company will emerge from this crisis. Its bankruptcy filing is a clear indicator of the serious financial strain it is under as it attempts to manage the fallout from the massive data breach.

Note: Thank you for visiting our website! We strive to keep you informed with the latest updates based on expected timelines, although please note that we are not affiliated with any official bodies. Our team is committed to ensuring accuracy and transparency in our reporting, verifying all information before publication. We aim to bring you reliable news, and if you have any questions or concerns about our content, feel free to reach out to us via email. We appreciate your trust and support!