Home Depot's Top Officers and Directors Face Questions About Role in Data Breach
Shareholder and consumer rights law firm Schubert Jonckheer & Kolbe LLP today launched an investigation into whether the officers and directors of The Home Depot, Inc. (NYSE: HD) breached their fiduciary duties to the company by failing to take adequate steps to prevent its massive data breach announced in September 2014.
As a result of the breach, 56 million credit and debit card numbers were exposed to criminals over a five-month period, resulting in dozens of lawsuits, including class actions from consumers and banks seeking substantial damages. These actions allege that Home Depot failed to take appropriate security measures to ensure that the financial and personal information of its customers was protected.
According to the New York Times, hackers installed malware to pilfer payment data from Home Depot’s registers and sent that data to servers outside the United States. The newspaper revealed that Home Depot’s own employees knew the company was at risk, even before the breach. “Some members of its security team left as managers dismissed their concerns. Others wondered how Home Depot met industry standards for protecting customer data. One went so far as to warn friends to use cash, rather than credit cards, at the company’s stores.”
BusinessWeek reported that five former employees described Home Depot as having a preference for “C-level security” because upgrades would be too expensive and could disrupt business. These former employees disclosed that when they attempted to strengthen security, they were rebuffed by Home Depot’s executives, including information-security chief Jeff Mitchell.
The Schubert Law Firm's investigation concerns the extent to which certain Home Depot officers and directors knew or should have known of the company’s lax security practices and lack of adequate internal controls, including any warnings they may have received from government agencies.
If you currently own Home Depot stock and wish to obtain additional information about the investigation and your legal rights, please fill out our form (at right) or contact Noah Schubert by phone at 415-788-4220.