Corporations across the United States have been facing drastic problems with the looming threat of cyber-security and potential cyber-attacks and other cyber-related crimes. Most corporations seem to be losing out not only on client data, but also massive amounts of trade secrets to hackers across the world. Cyber-attacks directed towards many countries have resulted not only in a direct loss of business, but also in public confidence and share market value of the respected companies. This year there was a growth reported in the cyber-crimes especially in the United States. The lack of investment in sophisticated security has led to declining market sales.
The abundant losses
Target Corporation (NYSE:TGT) has been one of the many organizations that have been the victim of a major cyber-crime. The Minnesota-based multi-billion dollar retailer was slapped with a lawsuit pertaining inactive and complacent approaches towards cyber-security. The multi-billion dollar corporation was hacked, resulting in the compromise of nearly 40 million credit card credentials. It has also resulted in the loss of over 70 million people in the United States. An estimated 110 million people have suffered in one way or the other through the cyber hack.
The company’s stakeholders seem to have also taken a very strong hit due to the crisis. Most of the company’s lending institutions which comprise of banks and credit unions have also suffered from the drastic misfortune. Over 100 million dollars, worth of losses has been reported due to the attack. The lending institutions have blamed the company for being the ultimate culprit, as they did not practice stringent security measures to protect consumer identity.
The settlement details
Even though Target has agreed to take strict measures to avoid such reoccurrences, the company’s creditors were not placated. The efforts were in vain, and a lawsuit was filed against the company in a Minnesota district court. Target agreed to settle the case outside of court to the tune of settlements worth 39.4 million dollars. The consolidated efforts of various financial institutions resulted in the multi-million dollar settlement by the retail giant. The settlement comprises of 20.25 million dollars to be paid out to banks and credit unions while an additional 19.11 million dollars to reimburse MasterCard Inc. (NYSE:MA) users who have been one of the largest affected parties. Target was not willing to contest the claims of the plaintiff and agreed to settle with the plaintiffs with the Minnesota district court oversight.