Bloomberg Law: Privacy & Data Security brings you single-source access to the expertise of Bloomberg Law’s privacy and data security editorial team, contributing practitioners,...
May 21 --Target Corp. said it couldn't predict in a May 21 Form 8-K filing with the Securities and Exchange Commission what its total specific costs might be to respond to a massive payment card data breach.
In December 2013, Target revealed that hackers stole card data and personal information from tens of millions of shoppers.
In March, Target told a Senate panel that it had clues about the attack weeks before responding and was exploring why it took so long to react.
Form 8-K filings are required when publicly traded companies face “unscheduled material events or corporate changes,” according to the SEC. Target said it filed the new 8-K report because it released a public statement on its first quarter earnings in which it announced a drop in first quarter earnings as well as cutting its annual profit outlook.
In January, Target said the breach had resulted in significant direct costs.
In May, Target announced that its chief executive officer, Gregg Steinhafel, was stepping down as a result of the breach and its effect on the company's reputation with customers .
But the retail giant now says it cannot put a dollar figure on the expenses related to the breach. “At this time, the Company is unable to estimate future expenses related to the data breach that occurred in fourth quarter 2013,” the 8-K filing said.
Expenses may include payments associated with potential claims by the payment card networks for alleged counterfeit fraud losses and non-ordinary course operating expenses (such as card re-issuance costs), REDcard fraud and card re-issuance expense, payments associated with civil litigation, governmental investigations and enforcement proceedings, expenses for legal, investigative and consulting fees, and incremental expenses and capital investments for remediation activities.
The 8-K report concluded that the breach response costs “may have a material adverse effect on Target's results of operations in second quarter and full-year 2014 and future periods.”
Full text of Target's May 21 Form 8-K filing is available at http://op.bna.com/pl.nsf/r?Open=dapn-9kbkkp.
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