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News Now

CU System
Heartland faces class action suit from investors
NEW YORK (4/2/09)--Yet another class action lawsuit stemming from last year's data breach has been filed against cards processor Heartland Payment Systems, this time on behalf of investors who purchased or acquired the company's securities. Murray, Frank & Sailer LLP filed the lawsuit in the U.S. District Court for the District of New Jersey on behalf of investors who acquired securities between Aug. 5, 2008 and Feb. 23, 2009 (Business Wire March 27). The complaint charges Heartland and some of its executives with violations of federal securities laws, saying that during the period, Heartland made false and/or misleading statements and failed to disclose material adverse facts about its business, operations and prospects. Specifically, the complaint alleges, the company misrepresented or failed to disclose that:
* Its safety and security measures designed to protect consumers' financial information were inadequate and ineffective; * Its payment processing system had been infected with malware as early as May 2008; * It was aware of a potential breach of its payment processing network; * It faced liabilities associated with the breach and increasing costs associated with implementing appropriate security measures; * It was at risk of losing customers; and * It lacked adequate internal controls.
On Feb. 24, when Heartland reported its earnings for fiscal year 2008 and fourth quarter 2008, it disclosed it might incur losses form the security breach.


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