Equifax will not survive fallout from massive breach, says technology attorney

Finance


Equifax will not survive the fallout from the massive data breach, technology attorney Mark Grossman predicted on Thursday.

There are 23 class-action lawsuits filed and a congressional investigation, as well as lawsuits that may be yet to come, he told CNBC.

“We’ve seen a $6 billion loss in market cap, estimated losses from these breaches in excess of $20 billion,” Grossman said in an interview with “Closing Bell.”

“This is ugly. The facts are still unfolding. It’s going to get worse. … We’re pointing to a bankruptcy. We’re pointing to a takeover.”

The Federal Trade Commission said Thursday it is investigating the hack, which could impact up to 143 million Americans. The House is also holding a hearing on the matter, with Equifax CEO Richard Smith expected to testify on Oct. 3. Meanwhile, Senate Minority Leader Chuck Schumer called for the firm’s executives to agree to testify in the Senate.

Equifax did not immediately respond to a request for comment on Grossman’s statements.

However, the credit reporting company said in an updated post on its website that the breach, which it identified internally in late July and disclosed to the public last week, was the result of criminals exploiting a vulnerability in a website application called Apache Struts.

“We continue to work with law enforcement as part of our criminal investigation,” the company said.

The breach exposed names, Social Security numbers, birth dates, and other identifying information as well as credit card numbers.

Grossman thinks it is almost inevitable that this will result in a new cybersecurity law.

“I see this as the straw that broke the camel’s back. When you think about it and you compare our privacy protections to what they have in the EU, it’s a joke in this country,” he said.

For example, in Europe, citizens have the “right to be forgotten” and have data removed from online, he noted.

— CNBC’s Liz Moyer and Linda Sittenfeld contributed to this report.



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