Heartland Update: Shareholder Suit Dismissed; Hacker to Plead Guilty

The shareholder class action suit brought against Heartland Payment Systems following its well-publicized data breach was dismissed in a U.S. district court in New Jersey on Monday, Dec. 7.

The complaint, which alleged that Heartland executives misrepresented the state of the company's computer network security, was denied by U.S. District Court Judge Anne Thompson. The lawyers representing Heartland's shareholders may file for reconsideration or retrial in the same court in New Jersey, or they can appeal the ruling in the Federal Court of Appeals.

Heartland's media contact says company leaders are pleased with the outcome of the case. However, there are still two breach-related class action suits by banking institutions waiting before a U.S. District Court judge in Houston. The next step in these proceedings is a filing from Heartland, expected later this month.

"So far, there has been no word as to whether the court will schedule a hearing to entertain oral argument on the motion or simply rule on the papers," says Richard Coffman, one of the attorneys representing the financial institutions.

Heartland Hacker to Plead Guilty In related news, the hacker indicted in the Heartland data breach, Albert Gonzalez, has entered into a plea agreement on the charges that he broke into Heartland Payment Systems, Hannaford Brothers grocery store chain, as well as convenience store chain 7-Eleven and two other national retailers. This news comes from a filing made by an attorney representing Gonzalez earlier this week in a New Jersey U.S. District Court, the same venue where the Heartland indictment was filed this summer.

Gonzalez, along with two unidentified Russian hackers, was charged with stealing more than 130 million credit and debit cards from the payments processor and other companies. He and 10 others were indicted in the TJX breach and pleaded guilty in that case.

The Heartland case will be merged with the two cases Gonzalez has already pleaded guilty to in Massachusetts. A federal judge transferred the case to the Boston court on Tuesday. Gonzalez already faces 15 to 25 years in prison and the sentencing -- scheduled for December 21 for the previous cases -- will most likely be delayed to include the Heartland charges from New Jersey.

About the Author

Linda McGlasson

Linda McGlasson

Managing Editor

Linda McGlasson is a seasoned writer and editor with 20 years of experience in writing for corporations, business publications and newspapers. She has worked in the Financial Services industry for more than 12 years. Most recently Linda headed information security awareness and training and the Computer Incident Response Team for Securities Industry Automation Corporation (SIAC), a subsidiary of the NYSE Group (NYX). As part of her role she developed infosec policy, developed new awareness testing and led the company's incident response team. In the last two years she's been involved with the Financial Services Information Sharing Analysis Center (FS-ISAC), editing its quarterly member newsletter and identifying speakers for member meetings.

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