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Sony to pay as much as US$8m to settle data-breach case
[LOS ANGELES] Sony Corp agreed to pay as much as US$8 million to settle claims from employees over the theft of their personal information in a computer hack linked to last year's release of the movie "The Interview." Sony will pay the current and former employees as much as US$4.5 million, with lawyers getting US$3.5 million, according to the settlement.
US officials have blamed North Korean hackers angered over the Seth Rogen and James Franco comedy for the attack, which was revealed in November. The breach exposed Hollywood secrets, destroyed company data and caused the movie studio to initially cancel the release of "The Interview," which was about a fictional plot to assassinate North Korea's leader, Kim Jong- Un.
Sony Pictures Entertainment, the Tokyo-based company's US movie studio, in June lost a bid to dismiss allegations that it was negligent in not maintaining adequate security to stop hackers from getting into the company's computer systems and releasing employee salaries, worker health data, racially tinged e-mail banter and other sensitive information.
Former employees alleged the company knew it had inadequate measures in place to protect its data and suffered breaches twice before last year's attack. The former employees claimed Sony made a "business decision to accept the risk" of losses associated with being hacked.
Some ex-employees claimed in July that identity thieves had attempted to use their credit cards and were trying to sell their personal data on black market websites. Sony argued the case wasn't suited to proceed as a class action and told the judge that none of the lead plaintiffs in the case had suffered financial loss as a result of the hacks.
Sony shares gained as much as 3.7 per cent to 3,390 yen, the highest intraday in two months, as of 10:18 am in Tokyo on Wednesday. The stock has climbed 83 percent over the past 12 months, compared with a 24 per cent advance for the Nikkei 225 Stock Average.
In the settlement, Sony will provide as much as US$2 million to reimburse employees who paid themselves for preventive identity-theft measures, according to a request for court approval filed Monday in Los Angeles. The company will also pay as much as US$2.5 million to reimburse employees who have become the victims of identity theft. In addition, Sony will provide identity protection services for employees who join the settlement.
Sony didn't admit liability or wrongdoing in the settlement.
The case is Corona v. Sony Pictures Entertainment Inc, 14- CV-09600, US District Court, Central District of California (Los Angeles).