Articles by Sean Murray

Sony Unlikely to Face Criminal Negligence Charges in Breach

In light of Sony’s data breach, many people are making the case that their weak security constitutes criminal negligence. It may be appropriate considering Sony is an electronics company who should be held to a higher standard. Had they been an international supplier of lumber, we might be willing to give them more leeway. But let us not forget that Sony is the victim here. If a man walks into a bad neighborhood holding handfuls of cash and is robbed, it may very well be his own fault, but to argue his negligence was downright criminal will be a tough sell.

Sony is even less likely to be pursued criminally considering it’s already difficult enough to even convict perpetrators these days. Examine the financial crisis of 2008 and you’ll quickly realize that misdeeds were rarely handled outside of civil court. A shining example is the U.S. v. Deutsche Bank in a recent mortgage fraud case. In an excerpt about it by Fox:

by choosing to bring a civil case, instead of a criminal one, the feds have assured that more alleged fraud on Wall Street during the housing bubble will be met with fines rather than more serious sanctions. The reasons for the reluctance to charge Deutsche Bank or its employees with criminal charges are diverse, but likely come down to the higher burden of proof and collateral damage that go hand-in-hand with criminal charges. “Firms can do significant damage to themselves, to taxpayers and their customers without committing crimes. Negligence, recklessness and stupidity can go a long way,” said Dan Richman, a law professor at Columbia.

 You hear that Sony? Stupidity isn’t criminal, even though many would like it to be. This doesn’t mean they’re off the hook completely since they are already liable for over $2 Billion as a result of customers (as calculated by the Ponemon Institute) canceling their current credit cards and having new ones issued. If card numbers have in fact been stolen, customers have no choice but to take this precaution at Sony’s expense.

Sony will have their day in court but no one will be going to jail…

– deBanked

https://debanked.com

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Mega Banks Enter Alternative Payments Market

The banks are losing the fight against the Durbin Amendment but don’t count them out yet. The threat of billions dollars losses from interchange fees revenue has inspired them to innovate. So much so that alternative payment processors such as PayPal will soon face the wrath of a sleeping giant.

Banks launch clearXchange

Bank of America, JP Morgan and Wells Fargo have teamed up to form clearXchange, a payment system for simple bank to bank transfers. In what they have dubbed a ‘coopetition’ (cooperative competition), there’s no new bank or merchant account needed. “PayPal and other systems require you to create an account separate from your bank account to transfer money, this new service will let customers simply log in to their existing bank account and enter the recipient’s name and e-mail address or phone number. The person they’re paying will then instantaneously receive an alert that money is being sent their way.”

And this doesn’t just compete against PayPal, it threatens cash and check payments as well. No longer will you be able to tell your friend that you don’t have any cash on you when they ask for the $20 you owe. D’oh!

Major retailers like Walmart stand to win big as a result of the Durbin Amendment, a triumph that will ultimately come to haunt them. With no interchange fees to earn, banks will get bored of debit cards and eventually phase them out. clearXchange is the new dawn of electronic payments and revenue for the big banks. And guess what? Durbin’s laws aren’t applicable to it. What have we done?

– deBanked

https://debanked.com