As was written by Walter Olson in his article “A Spurned Vendor — And a Tip To the FTC”…
In 2010, the Federal Trade Commission approached an Atlanta-based medical testing company, LabMD, with accusations that it had wrongfully left its customer data insecure and vulnerable to hackers. LabMD’s owner denied that the company was at fault and a giant legal battle ensued. To quote my post last year at Overlawyered:
…according to owner Michael Daugherty, allegations of data insecurity at LabMD emanated from a private firm that held a Homeland Security contract to roam the web sniffing out data privacy gaps at businesses, even as it simultaneously offered those same businesses high-priced services to plug the complained-of gaps.
Last week, finally, after five years, the case reached an administrative hearing at the FTC, which heard “bombshell” testimony given under immunity by former Tiversa employee Richard Wallace:
After LabMD CEO Michael Daugherty refused to buy Tiversa’s services, Tiversa reported false information to the FTC about an alleged security incident involving LabMD’s data, Wallace claimed in his testimony.
To read the full article, click HERE