March 18, 2005 | Popcorn, Popcorn

As cable news discovered on Wednesday with their wall-to-wall coverage of the oh-so important steroids-in-baseball controversy, Congressional hearings can make for pretty dramatic television.

On Tuesday, there were two other good episodes, both focused on data brokers, information security and identity theft.

I wrote a little bit about the House hearing, but didn't have time to check out the Senate Banking committee hearing (a continuation of the hearing from last week) until yesterday.

ChoicePoint's vice president Don McGuffey didn't have to suffer quite like ChoicePoint CEO Derek Smith did in the House, but he did face Senator Richard Shelby who meted out his questions like an old-time Southern prosecutor politely building his case.

There was also a great moment between Sens. Shelby and Sarbanes publicly reminiscing about a data privacy hearing from years ago that featured Ralph Nader and Phyllis Schlafly actually agreeing on something.

The video is here. (Real Media player needed)

Also worth noting is that McGuffey revealed that he told ChoicePoint's president Douglas Curling about the theft in late November.

Smith claims not to have learned about the breach of his company's lax security until late December or early January, just before a board meeting.

But if, as McGuffey testified, Curling learned about the police investigation in November, that means Curling knew of the potential damage to the company even as he and Smith began selling 458,600 shares between November 9 and February 15, the day the ChoicePoint story broke. The trades happened bi-weekly, as the men exercised long-held options and continued on past the announcement of the breach.

Together the men made a $16.6 million in profits during that time.

If I were Curling that testimony would scare me, given the Securities and Exchange Commission is already looking into the stock sales.

And Curling likely isn't the only one worried by recent events.

If these hearings are any indication of the level of ire in Congress, the data industry might be well advised to rethink their historical opposition to regulation and instead find a way to keep whatever legislation is coming from killing off their business.

Posted by Ryan Singel at March 18, 2005 11:42 AM

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» Choicepoint, March 19 from Emergent Chaos
Not In Chicago Anymore comments on Handling of Credit Related Information, and some of the possible repercussions of new law. Ryan Singel at Secondary Screening points out in "Popcorn, popcorn" that (Choicepoint Vice President) McGuffey testified unde... [Read More]

Tracked on March 19, 2005 08:12 AM

» Choicepoint, March 19 from Emergent Chaos
Not In Chicago Anymore comments on Handling of Credit Related Information, and some of the possible repercussions of new law. Ryan Singel at Secondary Screening points out in "Popcorn, popcorn" that (Choicepoint Vice President) McGuffey testified unde... [Read More]

Tracked on March 19, 2005 08:12 AM