Alpharetta, GA: (Jan-24-08) A class action lawsuit was filed against Alpharetta-based info broker ChoicePoint, alleging that the company was negligent in the 2004 theft of records of more than 160,000 people and subsequent stock sales by top executives. ChoicePoint collects data on individuals, including social security numbers, real estate holdings, as well as current and former addresses. The suit claimed that chief executive Derek Smith and operating chief Doug Curling netted $16.6 million in profit from stock sales before the records theft was disclosed. The timing of the sales lead to an investigation by the Securities and Exchange Commission.
The suit, filed in US District Court in Atlanta, reached a settlement, in which the company agreed to a $10 million payout to resolve claims. Sources stated that neither ChoicePoint nor the individual defendants admitted liability in the settlement. The class includes people who bought stock between the time the breach was discovered and Feb. 15, 2005. Records show that in January 2006, ChoicePoint agreed to pay $15 million to settle Federal Trade Commission charges that the data warehouser's security and record handling procedures violated consumers' privacy rights. [