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CHICAGO, May 2, 2014 /PRNewswire/ -- Many businesses in a variety of industries, including private equity firms and their portfolio companies, can experience data security breaches. Violations often involve the loss of customers' personal and credit information, and many times, go far beyond the potential loss of financial information or regulatory penalties. The bad press from a security breach could equate to the loss of thousands, if not millions, of customers. In addition, the greater hit is often in the form of reputation and goodwill erosion, and the possibility of liability suits.
In McGladrey's Private equity firms may inherit data attacks from acquisitions, there are a few key items a company should consider:
As a private equity firm acquiring a new business, could you be held responsible for existing ineffective security strategies, resulting in breaches within the acquired company? Further still, post-deal close, could you encounter challenges related to compromised intellectual property of the acquiring business and resulting aftermath? In a word, yes. You could inherit many of the problems from presale attacks, and pay for these security issues for years, in the way of fines, costly litigation or plummeting revenues.
To learn more, read McGladrey's Private equity firms may inherit data attacks from acquisitions.
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