Choicepoint Inc

Consumer data provider ChoicePoint Inc. said Tuesday that Securities and Exchange Commission staffers had closed their investigation of stock sales involving the company's top two executives without recommending the filing of any charges. The Alpharetta, Ga.-based company said it had received notification from the SEC that its probe of the stock sales, as well as possible identity theft, had been completed and that no enforcement action had been recommended.

The Federal Trade Commission on Thursday hit data broker ChoicePoint Inc. with the largest civil penalty in the agency's history for allowing sensitive consumer information to get into the hands of con artists last year. The commission levied a $10-million penalty on top of $5 million in restitution -- a total that amounts to more than 10% of the company's 2005 profit.

A fraud ring infiltrated one of the nation's largest collectors of consumer information and obtained credit reports, Social Security numbers and other information about tens of thousands of people in a massive case of identity theft. ChoicePoint Inc. said Tuesday that it had begun sending letters to about 35,000 California residents to tell them that their personal information may have been compromised.

The number of people being notified that they may have been caught in a massive identity-theft scam quadrupled Wednesday -- to 145,000 -- amid calls for better protection of personal information. ChoicePoint Inc., one of the nation's largest collectors of consumer data, said it would warn 110,000 people outside California that con artists posing as merchants had looked at information including addresses, phone listings, Social Security numbers and credit reports.

Senate Judiciary Committee Chairman Arlen Specter said Thursday that he would hold hearings on identity theft and information brokers after the revelation last week that ChoicePoint Inc., a databank with information on millions of people, was accessed by criminals. Democrats, including California Sen. Dianne Feinstein, have been calling for an inquiry into whether more regulation of such companies that buy and sell personal data is needed.

Business executives have a habit of kicking up a fuss over state regulatory initiatives that, in true California style, exceed the stringency of the federal versions. There's a rule restricting tailpipe emissions of greenhouse gases, starting in 2009, that has attracted a lawsuit from the entire global auto industry, for instance. And another on bank subsidiaries sharing data from credit reports with each other that the American Bankers Assn. has haled into court.

Scammers penetrated ChoicePoint Inc.'s vast online database of personal records five years ago in an operation similar to a more recent case that has triggered a national furor over privacy, court records show. Two Nigerian-born fraud artists were arrested in Los Angeles in 2002 by federal officials who charged that the pair used ChoicePoint to gain access to confidential information about at least 7,000 people and possibly many more, resulting in at least $1 million in losses.

The chief executive of information broker ChoicePoint Inc. told interviewers last week that a recent security breach was the only such incident in the company's history, despite the fact that criminals had gained access to its database with similar methods at least once before. "This is the first time that that kind of process has really happened for us," Derek Smith said in a Feb.

Management experts tell us that companies sometimes reveal hidden skills when they're confronted with unexpected challenges, such as the need to recall a popular product or address a case of corporate malfeasance. Alpharetta, Ga.-based ChoicePoint Inc., the data-selling company at the center of an identity-theft scandal, has been displaying one of these hitherto unrecognized talents, big time.

Federal regulators are investigating why two top executives of information broker ChoicePoint Inc. earned more than $16 million selling stock in the weeks before outrage over a massive identity theft engulfed the company. ChoicePoint said Friday that the Securities and Exchange Commission's staff had launched an inquiry into the stock sales and the company's handling of a security breach that has sparked a national furor over privacy.