Shareholders Claim Damages from Wyndham Hotels Security Breach

business litigation lawyer Atlanta

business litigation lawyer AtlantaLike many other consumer-oriented businesses, Wyndham Worldwide Corp., was targeted by hackers in search of personal consumer data.  At least three data breaches, involving customer information and credit card numbers, occurred between 2008 and 2010.

 

Wyndham, which operates a chain of moderately-priced hotels across the country, was hit with a suit earlier this month by a group of investors, for breach of fiduciary duty, and squandering company resources.

 

The shareholders’ complaint alleges that the hotel chain’s directors and officers, “unreasonably and unnecessarily exposed consumer’s personal data to unauthorized access and theft.”  The suit alleges that databases stored credit card data without scrambling the numbers, failed to disclose security breaches to investors until years after they had occurred, including failing to mention the incidents in SEC filings, and then hired pricey outside investigators to determine what had happened.

 

Complainants allege that, “the defendants’ failures to implement appropriate internal controls at WWC designed to detect and prevent repetitive data breaches have severely damaged WWC,” and that Wyndam’s failure to appropriately protect consumer data has damaged the company’s reputation, which in turn has harmed their investment as shareholders.

 

According to Bloomberg News, Wyndham’s representative fired back that it was not, “clear that these shareholders have suffered any legally cognizable harm or damages.”  The company claims it has taken steps to improve cyber security throughout its system, and has made protecting consumer data a significant priority for the future.

 

Whether your business is privately held or publically traded, you need an attorney who understands the importance of protecting your client, supplier, and vendor data and information, establishing sound corporate policies and procedures, and protecting your company’s rights if breaches occur. James J. “Jim” Thomas II has more than 35 years of experience advising Georgia businesses and handling complex business litigation.  Jim can also help you with the analysis, evaluation, and resolution of existing and potential litigation in all aspects of business law. Visit www.litigationatlanta.com online or give Jim a call at 404-869-5248 to set up a free consultation.

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