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News from the Government Oversight Committee

June 11, 2014
Screen shot 2014-07-14 at 11.30.35 AM Ms. Kelly Tshibaka Acting Inspector Oeneral
Federal Trade Commission Room CC-5206
600 Pennsylvania Avenue, NW Washington, D.C. 20580

Dear Ms. Tshibaka:

The Committee on Oversight and Government Reform is investigating the activities of Tiversa, Inc., a company that provided infmmation to Federal Trade Commission in an enforcement action against LabMD, Inc. In 2008, Tiversa allegedly discovered a document containing the personal information of thousands of patients on a peer-to-peer network. Tiversa contacted LabMD in May 2008, explaining that it believed it had identified a data breach at the company and offering "remediation" services through a professional services agreement. LabMD did not accept Tiversa's offer because LabMD believed it had contained and resolved the data breach. Tiversa, through an entity known as the Privacy Institute, later provided the FTC with a document it created that included information about LabMD, among other companies. Apparently, Tiversa provided information to the FTC about companies that refused to buy its services. In the case of LabMD, after Tiversa provided questionable information to the FTC, the Commission sought an enforcement action against the company under its Section 5 authority related to deceptive and unfair trade practices.

In addition to concerns about the merits of the enforcement action with respect to the FTC' sjurisdiction, the Committee has substantial concerns about the reliability of the information Tiversa provided to the FTC, the manner in which Tiversa provided the information, and the relationship between the FTC and Tiversa. For instance, according to testimony by Tiversa CEO Robert Boback, the Committee has learned of allegations that Tiversa created the Privacy Institute in conjunction with the FTC specifically so that Tiversa could provide information regarding data breaches to the FTC in response to a civil investigative demand. The Committee has also learned that Tiversa, or the Privacy Institute, may have manipulated information to advance the FTC' s investigation. Ifthese allegations are true, such coordination between Tiversa and the FTC would call into account the LabMD enforcement action, and other FTC regulatory matters that relied on Tiversa supplied information.

Further, the Committee has received information from current and former Tiversa employees indicating a lack of truthfulness in testimony Tiversa provided to federal government entities. The Committee's investigation is ongoing, and competing claims exist about the culpability of those responsible for the dissemination of false information. It is now clear, however, that Tiversa provided incomplete and inaccurate information to the FTC. In a transcribed interview with Oversight and Government Reform Committee staff, Mr. Boback testified that he received "incomplete infonnation with regard to my testimony of FTC and LabMD." He stated that he now knows "[t]he original source of the disclosure was incomplete."

To read more of this letter, click HERE

To download a PDF copy of this letter, click HERE

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More from the Oversight Committee….

Ms. Kelly Tshibaka Acting Inspector Oeneral Federal Trade Commission Room CC-5206 600 Pennsylvania Avenue, NW Washington, D.C. 20580 Dear Ms. Tshibaka: The Committee on Oversight and Government Reform is investigating the activities of Tiversa, Inc., a company that provided infmmation to Federal Trade Commission in an enforcement action against LabMD, Inc. 1 In 2008, Tiversa […]

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Michael Daugherty is President & CEO of LabMD, an Atlanta-based clinical and anatomic medical laboratory with a national client base. Read more...