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Contractor Folds After Causing Breaches

talkinsecurity writes "A single contractor, privately-held Verus Inc., has been traced as the source of no less than five hospital security breaches in the past two months — and those breaches have put the company out of business in a matter of weeks. Verus, which managed the websites of as many as 60 of the country's largest hospitals, has folded its entire business within the past few weeks, without a word to anyone. Apparently, a single IT error led to the exposure of at least five hospitals' patient data — at least 100,000 individuals' personal information — and caused Verus' primary investor to pull the plug. The hospitals, which initially reported their breaches separately, were left with no one to sue."

274 comments

  1. And that's the problem with corporations by Overzeetop · · Score: 5, Interesting

    Nobody is held accountable for the actions of a corporation. The board of directors and all officers should be held personally liable.

    (I happen to own a corporation, however as a professional engineer, I am also personally liable for everything which goes out the door.)

    --
    Is it just my observation, or are there way too many stupid people in the world?
    1. Re:And that's the problem with corporations by grogdamighty · · Score: 4, Insightful

      Ah, so the board of directors should be sued for all of their personal assets in order to pay for Joe Coder's mistake in leaving a backdoor opens. How many people do you think would start up businesses if they knew mistakes made by any employee could bankrupt them?

      --
      My other sig is funny.
    2. Re:And that's the problem with corporations by Raul654 · · Score: 2, Insightful

      Engineers are legally responsible for all of the design decisions that go into their work. I see no reason now to hold corporate shills - erm, CEOs and other board members - to the same standard.

      --


      To make laws that man cannot, and will not obey, serves to bring all law into contempt.
      --E.C. Stanton
    3. Re:And that's the problem with corporations by Anonymous Coward · · Score: 0


      I would agree to this the day politicians are also held personally liable for their actions, including lies (even when not under oath) and on having ties to business or organisations that benefit.

      I am from a European country. Imagine a corrupt organisation that you can never cease to do business with, is the permanent employer of every one of its auditors and data providers, and on the rare occasion a wrongdoing is found, one division of it fines the other but noone is affected because any shortfall is covered by the central authority. Noone has ever lost their job.

      Most recent case, turns out that the biggest party has been writing letters to editors under false names alleging to represent the opposition's view but wording their arguments poorly and offensively, and then writing arguments representing their own view. Noone has resigned, noone has been punished, covered only in a small local paper, will not lead to any consequences at all.

    4. Re:And that's the problem with corporations by jamesh · · Score: 1

      I think the idea would be that you could only sue the board if you could prove negligence, eg that a problem was pointed out to them but because it would cost money to fix, nothing was done.

    5. Re:And that's the problem with corporations by Anonymous Coward · · Score: 1, Insightful

      Ah, so the board of directors should be sued for all of their personal assets in order to pay for Joe Coder's mistake in leaving a backdoor opens.
      Yes. In fact, sue the shareholders as well-- it's their company.

      How many people do you think would start up businesses if they knew mistakes made by any employee could bankrupt them?
      Wow, that's retarded, even for /. Business is about risk. If they're not prepared to assume that risk, then they should stay the hell out of business.
    6. Re:And that's the problem with corporations by Gorshkov · · Score: 1, Troll

      Engineers are legally responsible for all of the design decisions that go into their work.
      Yes, they are - and they should be. But you're not held responsible for the decisons of *others*. If some contractor says "Rebar? We don't need no stinkin rebar!" and the bridge falls down, he's sued, not you - because it wasn't your design decision.

      I see no reason now to hold corporate shills - erm, CEOs and other board members - to the same standard.
      They are - that's the whole idea behind due diligence - showing that you DID do your job. But how the bloody hell do you think it's fair to hold a director responsible because some wanker forgot to put the firewall back in place? And wtf was it doing down in the FIRST place?
    7. Re:And that's the problem with corporations by deftcoder · · Score: 4, Informative

      A judge can reinstate a business for the duration of a trial though, even if it was dissolved (with no objections) through the normal channels.

      Just because your business was officially dissolved (through the Secretary of State's office) doesn't mean that you're off the hook for bad shit you pulled.

      If an employee or contractor was found to be negligent or acting outside of their role within the corporation, they can be found personally liable. That usually results in employee/contractor suing the business and vice versa.

      American business law is very interesting.

      --
      Peace sells, but who's buying?
    8. Re:And that's the problem with corporations by Anonymous Coward · · Score: 1, Interesting

      >I happen to own a corporation

      I did too, and I knew that as a director of the corporation I was personally liable for the corporations actions. You don't just get carte blanche as everyone here thinks you do. A corporation gives protection to its shareholders, who, in a larger corporation, have nothing to to do with the business.

      The liability is still limited compared to a proprietorship, but it is necessary, as running a business opens up a huge can of worms -- If someone slips and falls at your house, they will not win millions of dollars against you (they may win a reasonable settlement, though). As a business, the standard is higher, and you will lose everything you own as a sole proprietorship and end up bankrupt. And, with that issue in mind, few to no people would open new businesses, since the business wouldn't have the money to cover all losses to that extent.

      I studied this concept very carefully, as I owned a satellite company in Canada, a VERY dangerous and VERY liable to be sued (by the government) business. More than half of the satellite companies in my city have been sued out of existence, the government managing to end up seizing not only the assets of the company, but eventually managing to seize personal assets as well. The "crime" being selling US satellite equipment or service. Considering it took my company 18 months to be signed on to sell for a Canadian satellite company (ExpressVu), which only happened under CRTC threat, I can understand the motivation. The last move by the government here was to extend the fines and reach of the laws (luckily it didn't pass as it was election time) so that a corporation importing a single US receiver (not even selling it or purchasing service for it) would be liable for up to $750,000 in damages between the government fines, and set fines for ExpressVu and StarChoice. Ho-hum. For a canadian household it would "only" be $200,000... Enough whining, anyways. :D

    9. Re:And that's the problem with corporations by MikeBabcock · · Score: 1

      Because major corporations have no chance at ruining peoples' lives the way engineers do? Ask yourself why professional engineers are held to such a standard in society, then ask yourself what effect other private corporations can have on peoples' lives.

      Large corporate decision makers should not be immune from blame for their mistakes -- with great power and all that.

      --
      - Michael T. Babcock (Yes, I blog)
    10. Re:And that's the problem with corporations by Qzukk · · Score: 1

      And wtf was it doing down in the FIRST place?

      Sounds like something some management-type would tell someone to do. Or maybe the admin saw too many Star Trek reruns and thought the company should lower the shields so they can beam the data up.

      --
      If I have been able to see further than others, it is because I bought a pair of binoculars.
    11. Re:And that's the problem with corporations by Applekid · · Score: 4, Interesting

      I think you missed the point. If Engineers are legally liable for their work that can put people at risk, perhaps Programmers should be legally liable for their work that can put people at risk. Maybe instead of figuring out how to line their pockets with money with their "certifications," Novell, Microsoft, Cisco, et al. could pool resources and lobby for a legally-weighty certification for Software Engineers much conventional Engineers already have. Perhaps an Engineer could enlighten me on the history of how those things evolved for them.

      You could have a Class-C license to code and that would mean you know how to develop without buffer-overrun vulnerabilities, SQL-injection vulnerabilities, things like that. A top Class-A license to architect secure designs and robust inter-system communications.

      CEOs and board members only know how to run a company: you know, management, budgets, allocations, etc. I'd be very surprised if Widgets, Inc. CEOs know the exact procedure and design decisions that lead to Widget Model 3928 being the way it is.

      Of course, the court system will help determine whether it was a renegade programmer or whether board-imposed policies and procedures lead to the hiring of an unlicensed one.

      --
      More Twoson than Cupertino
    12. Re:And that's the problem with corporations by Yoozer · · Score: 1

      You could have a Class-C license to code and that would mean you know how to develop without buffer-overrun vulnerabilities, SQL-injection vulnerabilities, things like that. A top Class-A license to architect secure designs and robust inter-system communications.
      And still you'll find a huge share of WTFs because if anything, the licenses will create a false sense of security and trust. "Of course it can't be Mr. Class-A, we've paid good money for his expertise and he can't possibly be wrong." Also, companies might think that they could replace 3 Class Cs with 1 Class A which then gets overworked, and because he's the top dog nobody has the guts to offer critique. More eyes will reveal more bugs (unless they're all equally incompetent, of course).

      What you need is not a license but accountability; when you put your John Hancock under the QA document you give your word that the system's fault-free to the best of your efforts, and that you will take care of support.

      Being forced to take responsibility does a whole lot more than having a fancy piece of paper on your wall. The same responsibility would be nice for CEOs: lousy track record? Then you don't get any fancy stock options or nonsense like that.
    13. Re:And that's the problem with corporations by Raul654 · · Score: 2, Insightful

      How many thousands of people lost their life savings when Enron folded? (Days before the end, the CEOs and other higher ups were selling their stock like it was on fire, while other investors - mostly employees of the state of California - were locked-out and unable to sell their holdings). What about MCI/Worldcom? What about ValueJet, which had dozens of safety violations prior to the crash of Flight 592 and for which the company was later indicted on 100+ counts of murder? What about Power Fasteners, which did such a shoddy job of constructing the Big Dig that the roof collapsed and killed someone (they were also indicted). What about ExonMobile, which (as a result of its operations 1888-present) is responsible for something like 5-8% of all global warming and will almost certainly face future lawsuits about it? Corporations can and willingly cause massive destruction on a global scale. They destroy lives, but they are ultimately a legal fiction created for the purpose of shielding the true decision makers from the legal liability of their decisions.

      --


      To make laws that man cannot, and will not obey, serves to bring all law into contempt.
      --E.C. Stanton
    14. Re:And that's the problem with corporations by SillySlashdotName · · Score: 1

      Perhaps an Engineer could enlighten me on the history of how those things evolved for them.

      Check out the Code of Hammaurabi, a Babylonian king, which said that, if a person builds a building for another and the building falls in and kills the owner, the builder shall be put to death. There are other parts as well, but the total is that the builder/engineer is held responsible/liable for the construction done by that builder/engineer.

      Not an engineer, but I do watch the discovery channel...

      --
      Acts of massive stupidity are almost never covered by warranty. --me.
    15. Re:And that's the problem with corporations by Raul654 · · Score: 1

      Aren't these the same directors who (for Enron, Worldcom/MCI, Adelphia Communications, etc) claimed that they had no idea that their companies were operating deeply in the red and that their quarterly earnings reports weren't worth the paper they were printed on? These are the same people who go before congress and suddenly develop very bad memories.

      --


      To make laws that man cannot, and will not obey, serves to bring all law into contempt.
      --E.C. Stanton
    16. Re:And that's the problem with corporations by Gorshkov · · Score: 2, Informative

      Aren't these the same directors who (for Enron, Worldcom/MCI, Adelphia Communications, etc) claimed that they had no idea that their companies were operating deeply in the red and that their quarterly earnings reports weren't worth the paper they were printed on? These are the same people who go before congress and suddenly develop very bad memories.
      No, they're different directors. That lot WAS jailed - and they were jailed because of THEIR decisions, not those of their underlings.
    17. Re:And that's the problem with corporations by Zaiff+Urgulbunger · · Score: 1

      But then again, couldn't they sue the person who did the acceptance testing? I mean, they *did* have someone acceptance test it, right?

    18. Re:And that's the problem with corporations by firewrought · · Score: 1

      ...when you put your John Hancock under the QA document you give your word that the system's fault-free to the best of your efforts...
      Not all software needs to be engineered to space shuttle reliability. Humanity has things to do and places to go, and we wouldn't have a technological revolution if was tied to some 40 lines of code per man-year. We don't have the time and talent for that. It makes sense to stratify our level of quality according to how critical the code is.
      --
      -1, Too Many Layers Of Abstraction
    19. Re:And that's the problem with corporations by Hoi+Polloi · · Score: 1

      And if those corporate executives push faulty designs or pressure bad descisions? Mansluaghter charges are being saught in connection with the Power Fasteners company after it was found they knowingly ignored issues with epoxy based fasteners that later led to a woman's death in the Boston Harbor tunnel. Other companies involved in this and massive cost overruns and poor design descisions (major leakage in tunnel), such as Bechtel and Modern Continental Construction, have seemingly gotten off the hook.

      --
      It is by the juice of the coffee bean that thoughts acquire speed, the teeth acquire stains. The stains become a warning
    20. Re:And that's the problem with corporations by Lord+Ender · · Score: 1

      I can already tell you the results: Every failure is a result of both management and engineer failures.

      You are suggesting that all of senior management and many of the engineers at Boeing should all go bankrupt when a plane crashes due to a design flaw (because some jury awarded 10 billion for pain and suffering), then I would no longer invest, work, or serve in the US. I wouldn't be the only one.

      Basically, you are suggesting the economic suicide for an entire country.

      --
      A slashdotter who didn't build his own computer is like a Jedi who didn't build his own lightsaber.
    21. Re:And that's the problem with corporations by SillySlashdotName · · Score: 2, Insightful

      CEOs and their cohorts make very good money to direct and lead their companies, but they are not personally responsible for the results of their leadership and direction.

      Boards of Directors are supposed to be outside overseers who make sure those INSIDE the company are not blinded by internal goals and policies or politics; they are PAID to provide an outside view and unbiased viewpoint.

      My point is that there is already several layers of 'leadership' that are supposed to be providing adhearance to standards, rules, and laws, and that those layers are WELL paid for that function. I don't see a hugh additional burden in making them legally responsible for performing (or not performing) their function.

      Hold them responsible for Joe Coder's mistake? No, but the company should be responsible for ensuring that Joe Coder can not - through stupidity, incompetence, or accident - do something like the article and destroy the company/corporation. If safeguards are not in place, then SOMEONE should be responsible for the screwup, and the BoD and CEO, COO, CIO, etc SHOULD BE held responsible for not having safeguards in place.

      "We hired the best coder minimum wage could buy and turned them loose without any oversight" is not sufficient to absolve them of responsibility, at least in my mind.

      --
      Acts of massive stupidity are almost never covered by warranty. --me.
    22. Re:And that's the problem with corporations by canuck57 · · Score: 1

      I think you missed the point. If Engineers are legally liable for their work that can put people at risk, ....
      You could have a Class-C license to code

      That is BS, you would get canned right away for not doing what the boss says irregardless of what you think. I am faced with these arguments it seems every 2 weeks. I just make sure I have my CYA in good old fashioned printed emails.

      The ONLY solution is to hold those in power, primarily senior management (hospitals and contractor) accountable. That means the CIO/CTO and CEO. They are the ones cutting corners, padding their exit clauses and have corporate insurances. They are the ones calling the shots and divvying out the money. They are the ones saying security does not mater and getting away with it. If we did as you suggest, another reason to ship code development offshore.

      The programmer is just the sacrificial lamb, writing good code takes time, money and lots of peer reviews driving up the cost of software development. The hospital should have objectively reviewed the contractors security.

      The hospitals share in this, if the service is too cheap, you know they are cutting corners to get the contract. They too hold liability. In fact, that is a good place to start. Let patients sue the hospital, as they authorized the contractor is their agent. Then let the hospital collect damages from the contractor.

    23. Re:And that's the problem with corporations by pev · · Score: 1

      If Engineers are legally liable for their work that can put people at risk, perhaps Programmers should be legally liable for their work that can put people at risk.

      Reality check : Most programmers are under commercial pressures from managers and customers. For example, as a programmer I can reccommend using Misra-C and a very thorough testing regime for a project but that doesn't mean the customer is willing to pay for it.

      This has always been a real bugbear of mine and I suspect always will be. Given that this is the real world scenario, why should I be held to account for deficiencies that I'm not allowed to address due to commercial issues?

      ~Pev
    24. Re:And that's the problem with corporations by Anonymous Coward · · Score: 0

      could pool resources and lobby for a legally-weighty certification for Software Engineers much conventional Engineers already have Except, most conventional engineers do not have these certifications. Most people with a PE are doing work civil engineering or probably a few electrical engineers who are responsible for power systems. Trust me when I say that most the engineers working for large corporations have no PE. They are not required for most EEs. I do not believe my aero friends have them either, and they are designing your aircraft. Oh, and I would bet most mechanical engineers and other engineers working in the automobile industry are not caring around the PE title either. So, I think saying Software Engineers need it is a joke. (This said, what does "Software Engineer" define. I would not classify most people developing web sites "Software Engineers". So are we only classifying the people who are designing applications and writing real source code to be "Software Engineers"?)

      You could have a Class-C license to code and that would mean you know how to develop without buffer-overrun vulnerabilities, SQL-injection vulnerabilities, things like that. A top Class-A license to architect secure designs and robust inter-system communications. Then no one would have a Class-A very long. There are very few, if any, applications released to the wild that are completely free from some degree of bugs or security problems. Software design would come to a halt, as people would be unable to release products up to spec. This is simply absurd.

      Of course, the court system will help determine whether it was a renegade programmer or whether board-imposed policies and procedures lead to the hiring of an unlicensed one. People complain we are out sourcing now, but if this were seriously done, we'd see most every programming job in the US moved overseas, practically overnight. No one would take the chance. There is absolutely no reward in this for anyone. Not to mention that juries are horribly ineffective at providing proper judgments if legal suits. The awards some of them have handed down have been ungodly and have bankrupted many people. I mean you can only extort so much money from someone. This said, for each flaw that "could have" hurt someone (not even actually causing harm) could ruin the well-being of a very large number of people and corporations. With very complex code, how do you pin a problem on a single individual? Seriously, I hope you were being sarcastic, because there is no way this would be anything but social and economic suicide.
    25. Re:And that's the problem with corporations by jedidiah · · Score: 1

      This highlights the problem of mindless corporate behaivor on a grand scale. When it all finally comes home to roost, the impact is dramatic and enormous. This sort of BS played out on a larger scale is capable of trashing the entire economy. That very thing may be playing out in the mortgage industry right now.

      No one ever bothers to consider the cost of cleanup when a corporation goes poo. It could be computer security breaches, toxic waste or wide scale financial instability.

      --
      A Pirate and a Puritan look the same on a balance sheet.
    26. Re:And that's the problem with corporations by jedidiah · · Score: 1

      There are similar examples of strict tort liability from the bible. You know the old expression: an eye for an eye.

      --
      A Pirate and a Puritan look the same on a balance sheet.
    27. Re:And that's the problem with corporations by jc42 · · Score: 1

      Nobody is held accountable for the actions of a corporation. The board of directors and all officers should be held personally liable.

      Ah, but if you dig into the history of how corporations came to be, and why they are legally considered "persons", you'll find that the primary purpose of a corporation has always been to insulate the officers from prosecution.

      "I didn't do it; the corporation did it." Without this protection, there would be no real reason for corporations.

      In a case like this, I can guess with some confidence what happened. I've worked on a lot of web sites. In every one of the, with no exceptions, my bosses have ordered me to use software that I knew to be insecure and unsecurable (at least within the time frame that I was allowed). Every time. But there's no chance whatsoever that any managers will be prosecuted for the results of such orders.

      Management is highly susceptible to the claims made by software snake-oil salesmen, especially for products like those now labelled "Web 2.0". If you want to be hired to work on web sites, you have to be prepared to deal with such things, and make the best you can of them.

      If we "software engineers" (chuckle;-) were legally responsible for the effects of software that we're ordered to use (or be fired) by management, you'd be seeing a lot fewer web sites, because you wouldn't be able to hire a web developer.

      Maybe that would be for the better. But it's not the way business wants to move, and they're the ones paying Congress and other legislatures for the laws.

      --
      Those who do study history are doomed to stand helplessly by while everyone else repeats it.
    28. Re:And that's the problem with corporations by Anonymous Coward · · Score: 0

      Mansluaghter charges are being saught in connection with the Power Fasteners company after it was found they knowingly ignored issues with epoxy based fasteners that later led to a woman's death in the Boston Harbor tunnel.

      Knowingly? BS. Someone called up Power Fasteners and ordered some epoxy out of their catalog for about $1400. Power Fasteners shipped it. If the builders had used this epoxy, the concrete slab would not have fallen.

      But the builders didn't use that epoxy - instead, the builders bought and used some other epoxy from Power Fasteners that wasn't rated for the load & longevity. How is that Power Fasteners fault?

      Power Fasteners made and sold epoxy that met their documented specs for that epoxy. Power Fasteners never said use this other epoxy to hang your concrete slab.

      However, the legal climate being what it is, it looks like Power Fasteners is going to get fucked in the ass, when it is the fault of the builders & engineers.

      Either the plans were faulty, in which case the architects/engineers are liable, or the construction was faulty, in which case the builders & engineers are liable. The epoxy that Power Fasteners made & sold met the documented quality standards of Power Fasteners. If the builders choose to ignore the specs from Power Fasteners, that is the builders fault.

    29. Re:And that's the problem with corporations by Opportunist · · Score: 1

      Could we expand that to the USE of computers? Like, having a class F (or whatever) license so you're allowed to hook a computer to the net, because you know that you should update your system regularely and that the friend you don't know who sent you that greeting card is a spammer who tries to get you infected with a trojan?

      --
      We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
    30. Re:And that's the problem with corporations by Opportunist · · Score: 2, Insightful

      Let me clue you in how this works in many corporations.

      The lot that makes up the top level management is usually small. You know each other. You see each other on various occasions. Doesn't it strike you as odd that every time some manager needs to "take a break" because his blunders were too obvious that miraculously someone from abroad comes in to take over? Guess what he did there. He needed a break.

      The group is small and very selective who it allows into its ranks. You don't just get a ton of degrees from various business schools and then suddenly get an invitation to a talk whether you should be the next CEO of Siemens or Bosch.

      This group, now, forms the whole lot. The CEO, the board, the whole levels and circles meant to control each other. And if you behave, next time you may be the CEO.

      --
      We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
    31. Re:And that's the problem with corporations by flappinbooger · · Score: 1

      Since when is an engineer liable for mistakes? Now, an Engineer, a Professional Engineer, IS responsible. His name, and his seal are on his drawings. A PE has liability insurance just like a doctor. A non-professional engineer working under a Professional Engineer, or in a company, is not liable.

      However, screw up too many times, and you'll likely pay with your job.

      --
      Flappinbooger isn't my real name
    32. Re:And that's the problem with corporations by Hoi+Polloi · · Score: 1
      Did you read the link?

      By February 2000, a quality control official for Powers said in an e-mail that the company was losing business in Asia because of the problems and that "we are very close to be forced . . . to quarantine the product." "I don't have to tell you of the serious consequences both in terms of direct sales and in loss of face and reputation," the e-mail said.
      --
      It is by the juice of the coffee bean that thoughts acquire speed, the teeth acquire stains. The stains become a warning
    33. Re:And that's the problem with corporations by billdar · · Score: 1
      I think you're confusing certificates with licenses. A license leads to accountability.

      What you describe is exactly what happens for the folks that design office buildings, roads, dams, etc. But when sh*t goes down, you need only to look at the stamp at the bottom of a drawing to find out that Joe Engineer from Company X f*cked up. Results: license revoked, lose jobby-job, and incur legal/financial damages.

      You're probably just jaded on the whole MSCE, Cisco, Novell certificates folks wave around. They are used to quantify an individuals skill, but you'll never see a web site, database, or server put into production that can be tracked to an individual.

      Hell, even an off-the-shelf Microsoft Windows license explicitly states that:

      IN NO EVENT SHALL MICROSOFT OR ITS SUPPLIERS BE LIABLE FOR ANY SPECIAL, INCIDENTAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES WHATSOEVER (INCLUDING, BUT NOT LIMITED TO, DAMAGES FOR LOSS OF PROFITS OR CONFIDENTIAL OR OTHER INFORMATION, FOR BUSINESS INTERRUPTION, FOR PERSONAL INJURY, FOR LOSS OF PRIVACY, FOR FAILURE TO MEET ANY DUTY INCLUDING OF GOOD FAITH OR OF REASONABLE CARE, FOR NEGLIGENCE, AND FOR ANY OTHER PECUNIARY OR OTHER LOSS WHATSOEVER) ARISING OUT OF OR IN ANY WAY RELATED TO THE USE OF OR INABILITY TO USE THE SOFTWARE

      How would you like your bridge builders to exercise a similar clause?

      --
      I am billdar, and I approve this message.
    34. Re:And that's the problem with corporations by letxa2000 · · Score: 1, Insightful

      The hospitals, which initially reported their breaches separately, were left with no one to sue.

      No-one to sue? Oh my gosh, it's the end of the world! How can there possibly be no-one to sue? No business or individual is complete if they don't have someone to sue. Oh, the humanity!

    35. Re:And that's the problem with corporations by Phanatic1a · · Score: 4, Insightful

      Reality check : Most programmers are under commercial pressures from managers and customers.

      Reality check: Most engineers are under commercial pressures from managers and customers. That doesn't mean that if my boss wants me to use paper clips instead of my recommendation of high-tensile steel bolts, I'm on firm ethnical ground saying "Okay, paper clips it is." I have a professional, ethical responsibility to not build shoddy product. Don't programmers?

    36. Re:And that's the problem with corporations by Anonymous Coward · · Score: 0

      Did you read the link?

      Did you?

      Power Fasteners makes many epoxy products. The longevity problems are with a quickset product. Power Fasteners sold a non-quickset epoxy for the big dig. The plans called for a non-quickset product. Power Fasteners believed the big dig was using a non-quickset product.

      The big dig actually used a quickset product.

      Why is this the fault of Power Fasteners?

    37. Re:And that's the problem with corporations by DrgnDancer · · Score: 2, Informative

      In those cases the executives in question committed criminal acts and were charged with crimes. There's a difference between being punished because you did something wrong, and being punished because some goon five level down from you on the corporate chain made a dumb mistake. The OP mentions that as a professional engineer he is responsible for the action of his company, despite the fact that it is a corporation. Of course all professional engineering companies are REQUIRED to have at least one supervising professional engineer. Same with architecture firms, law firms, and lots of other "professional" companies. This is because at some point some one decided that there need to be a licensed professional personally in charge of licensed professional activities. If the board of the OP's company has members who are NOT professional engineers (unlikely and probably not legal though that is), they are NOT personally responsible if the bridge the company is building falls down (Which is why many industries ban non-professionals from even serving on the boards of professional companies.)

      If the argument is that perhaps IT should be made a legal "profession", with a certifying board to establish competency, requirements that a professional services IT company have a board certified IT professional who is responsible for the company's actions, and an expectation that large non-IT specific companies also have a board certified IT professional to manage company practices (like the legal or medical departments have certified doctors and lawyers), you might have a good idea. As it is you're asking that the members of a board of directors, who probably have no IT knowledge at all, personally pay for the actions of some guy several levels below them, who did something they probably wouldn't have even understood was bad at the time had they known he did it.

      Professional engineers are held responsible for the actions of their firms because by definition they understand and usually have to sign off on the actions of their underlings. If Bobo the rookie engineer makes some huge material strength error in his latest plans, it's OK (well not for Bobo probably, but for the company), because Bobo is by law supervised by at least one board certified professional engineer who should catch the mistake before s/he signs the plans. If the supervisor fails to catch the mistake, or if Bob the board certified engineer who works for himself makes the same mistake and signs his own plans, there is liability to the person who signed the plans. Since IT lacks any sort of professional organization to say "Sue is a certified IT professional", Sue's liability is limited to where she can be proved to have been negligent. Did she know that Bobo the rookie It guy made a mistake? who knows? Did she report it to her boss (who doesn't even have to know anything about IT to be her boss)? Who knows. Can she be sued? Maybe. Can her Boss? That pushing it. Can Bobo? Probably, but he makes 35K a year and owes 10 of it his credit card company. Not going to help you much I'm afraid.

      Now if it can be proven that one of the board ordered the firewall to be taken down, or that they knew it was down and took no action despite the realization that it would cause huge problems for their customers, then they might be personally liable. This would be a criminal action on par with what Enron's executives did. This would be willful misconduct. As it is, they probably didn't even realize the problem existed until it was so late that all they could do was jump ship.

      --
      I don't need a million points of light, just two points of multi-mode fiber and a 10 Gig-E router.
    38. Re:And that's the problem with corporations by Anonymous Coward · · Score: 1

      What about Power Fasteners, which did such a shoddy job of constructing the Big Dig that the roof collapsed and killed someone (they were also indicted).

      Power Fasteners did not build the Big Dig. Power Fasteners makes & sells many different kinds of epoxy. Power Fasteners made & sold some epoxy for the roof of the Big Dig. This epoxy met all of Power Fasteners documented quality standards, and the building standards of the Big Dig, and still does. No problems have ever been alleged or found with this epoxy.

      The problem is the builder (another company) did not use this epoxy.

      The builder ignored the plans and instead, the builder used a different Power Fasteners epoxy. This other epoxy was not rated for the load, and the ceiling fell.

      How is this the fault of Power Fasteners?

      What about ExonMobile, which (as a result of its operations 1888-present) is responsible for something like 5-8% of all global warming and will almost certainly face future lawsuits about it?

      BS. ExxonMobil did not burn oil and generate CO2. ExxonMobil takes oil out of the ground, ships it, refines it, and sells it. It is the end user who burns it and generates CO2.

      The end users are billions of people like you and me. Should we sue ourselves?

    39. Re:And that's the problem with corporations by Your.Master · · Score: 1

      Yes, but shortly after it points out that if the building falls down and kills the owner's son, then the builder's son should be put to death. Seriously. Your example is 229 and mine is 230. http://en.wikipedia.org/wiki/Code_of_Hammurabi Now, that is meant to punish the builder/carpenter/"engineer", but it includes somebody very much not responsible also have to take responsibility for somebody else's actions -- namely, his father's.

    40. Re:And that's the problem with corporations by RexRhino · · Score: 1

      Not all software needs to be engineered to space shuttle reliability. But Windows is sure engineered to space shuttle reliability! It only crashes once in a while! Bud-um-bum-bum!
    41. Re:And that's the problem with corporations by Bombula · · Score: 1
      left with no one to sue

      Nobody is held accountable for the actions of a corporation.

      This is what the limited liability function of corporations and LLCs is expressly designed to do. Bear in mind, however, that limited liability only holds so long as the deleterious consequences of corporate actions are from neglect and not from willful malfeasance. If you can prove the management and/or board of a corporation knew about a problem and did nothing to address it, you can nail them to the wall for it. But it is important to understand that the default position in tort (?) law is that companies never willfully expose their customers to risk because it is not in their best interests (profit) to do so. That's often a bunch of hogwash, of course, but that's the way the system works - it's an assumption parallel to the 'innocent until proven guilty' assumption.

      --
      A-Bomb
    42. Re:And that's the problem with corporations by Artifakt · · Score: 1

      There's a difference between being punished because you did something wrong, and being punished because some goon five level down from you on the corporate chain made a dumb mistake.

              Which is why the law calls for limited liability. Properly interpreted, that phrase means you (as a member of the board, say), have only some liability for what Goon did. You can be punished, but only to a limited extent. The point is, Goon can have done something seriously wrong (Drove a truckload of Dioxin away from the factory in the middle of the night, and poured it onto the ground where that new subdivision is being built). You can have done something much less blatantly wrong (Scrimped on budgeting background checks for your drivers, or telling the Dept Head "I don't care how you get rid of it, just do it."). There's still room for liability, and should be. In fact, you seem to be arguing from that perspective too, in your last paragraph.

              But, there are areas you're not addressing, Particularly the law (frequently misinterpreted here on Slashdot) which says corporate management has a duty to maximize shareholder profits. This does not include committing even the most minor criminal acts to do so. Once somebody commits an actual crime, the only defense that should fully protect higher management and owners is full non-compliance. It's not enough to say "I never ordered Goon to actually commit that particular crime", the management and owners need to be able to show they didn't create an environment where people thought their jobs were threatened if they didn't break the law somewhere. What's commonly called the 'veil of corporate secrecy' makes that hard to determine.
            This creates a set of alternatives society can live with. Either strip away much of the veil, (particularly for publicly traded corporations), or presume limited liability can by default extend pretty far for even fairly trivial errors so that somebody with deep pockets can be sued.

      --
      Who is John Cabal?
    43. Re:And that's the problem with corporations by Anonymous Coward · · Score: 0

      >That is BS, you would get canned right away for not doing what the boss says irregardless of what you think.

      Seems you value your paycheck more than your ethics. I'd feel pity for you, but you're not worth it.

    44. Re:And that's the problem with corporations by fbartho · · Score: 1

      The thing with programmers is that it's often hard to identify the effects a specific bug could have in a specific system. A library writer may know in a set of unlikely conditions, some function calls could lead to a failure to allocate a string. They may then return null to the caller for the library in that 1 case, but barring out of memory conditions, will never return null otherwise. A *user* for that library comes along, the library writer has a good reputation and the documentation for the library is very solid. He does his best effort, time permitting, to write secure code, he may even do a solid job of testing, when pressed for time, he has never triggered this specific error case, and his code doesn't know how to deal with a null pointer like that. Now imagine suddenly that this second guy could be another library writer, or he could be a maintainer. He may never know the details of every place his library or component is used, he just sees the applications he runs which appear to work fine with his library. Ethically the writer of the final product is responsible for the damage it causes, but unfortunately it's not as clear cut as real-world engineering. The first library writer's product is used everywhere, and others may trigger this specific error condition, but compensate for it by coincidentally knowing the circumstances that cause it cause other problems for them, or by programming in a paranoid fashion because they're a small project and absolutely trust noone. The second library layer may have been written before the bug in the first library was actually introduced. With the real world we have standards and clear specification requirements (sometimes). You can simulate a subcomponent that was contracted out to someone, and you can verify that the forces through your structure won't be above the tolerances for that component or that it's failure will be in known and acceptable modes. With the nesting of libraries and code programmers have it much harder. There are many libraries with many subcomponents of other subcomponents. Sometimes the subcomponents can be changed out from under a library, so the final application has no hope of knowing everything about the subcomponent change. Failures of a subcomponent can mean nothing in some applications or can mean more in others.

      The end of it all is also that it's not like a manager chose to force a programmer to pick the paperclick option, it's that a manager said you get this much testing time, at the end of that timeperiod the programmer has caught all the glaring bugs, and he's left with the knowledge that everything he anticipated (unit tests) is being handled. He doesn't have the certainty that everything is okay, but very few non-trivial program writers do, he could spend an extra year testing and never catch this one bug. It's only because 68 very large clients with thousands of users started testing the application for a continuously long amount of time that somebody eventually ran into the bug. It's like letting a small town's worth of people into the foundation of a skyscraper. You don't have a choice about them going there, so your code tries to catch anything that could cause damage. Your code manages to take away all the bombs and all the bulldozers, but you're still left with people with small chisels. You would think that they can't do anything with the chisel, but can you be 100% certain that they don't manage to chisel away until they make a hole in your pneumatic message transferring system (that was of course not part of your original design and analysis for this foundation, and was installed by a 3rd party contractor), and end up receiving all the messages for awhile including paychecks and SSN's of all your employees?

      --
      Gravity Sucks
    45. Re:And that's the problem with corporations by TheLink · · Score: 1

      Well darwinists might agree unless it was an adopted son. ;).

      --
    46. Re:And that's the problem with corporations by Anonymous Coward · · Score: 0

      Excuse me, but you are shooting in the wrong direction. Sony's backdoor wasn't the result of a programming error, it was a piece of malware 'by design'. The programmer's errors just brought the issue to the public attention.
      And yes, Sony and the people who ordered and authorized this piece of software to be made deserve to be severely punished, just as if they were individuals engaged in the same kind of activity.

    47. Re:And that's the problem with corporations by Applekid · · Score: 1

      While difficult, big dramatic problems that occur due to programming error (like exposing 100K patients' hospital records) can get traced down. That's part of the investigative process.

      Like a bridge that fails. It gets investigated. People get interviewed. Documentation gets reviewed. Maybe the blueprints asked for Steel formulation ABC that meets certain specifications but a vendor decided to be a cheapskate and provide Steel formulation XYZ which fails to meet them (or minus the conspiracy: steel rated less than the lab-tested ratings due to some error).

      So, after software investigation, it's learned that a particular module caused the error. The legally bound programmer, though interview and investigation, discloses the use of library A and that it ought to adhere to the specifications that the library's vendor published. If it falls short then it's not THAT programmer but someone else at the other vendor.

      Code doesn't just materialize (even if it comes out of a wizard or compiler or whatever) and thus can be traced back to an individual. It all depends, I suppose, on how badly it's wanted. If my mouse goes wonky that get fixed by rebooting it's a waste to investigate like this, naturally.

      --
      More Twoson than Cupertino
    48. Re:And that's the problem with corporations by jon287 · · Score: 1

      Agreed. There is yet no good reputation system among software engineers. Doctor, lawyers, civil engineers etc all have some sort of reputation system in place, MD, Bar, etc. What do software engineers have? MCSE?

      Its no wonder its so hard for management to tell competent system architects from java monkeys who have "years of experience in the field." (Hint: if you do the same thing wrong for 20 years, your "years of experience" just tend to make you an ass who does things wrong and can't be taught.)

      --
      To boldly use to and too two times and get it right too! They're not gonna believe their eyes when they see it there!
    49. Re:And that's the problem with corporations by devilspgd · · Score: 1

      The solution is fairly simple, don't import illegal equipment.

      --
      Give a man a fish, he'll eat for a day, but teach a man to phish...
    50. Re:And that's the problem with corporations by SillySlashdotName · · Score: 1

      Remember that children and wives were thought to be equivalent to property of the man of the household, and this makes more sense.

      If the builder causes the building owner to lose his progenity, his chance at a continuation of his genes, his unpaid help in his livelyhood, his provider in his old age, the code required the builder to lose his as well.

      The code was not intended (as I read it) to punish the son, but to punish the father to the same extent he caused harm to the building owner.

      The resr of the wikipedia rticle seems to support this, as it states that if a slave is killed, the builder is responsible for the price of the slave, and if goods are destroyed, the builder is responsible for the cost fo the goods.

      --
      Acts of massive stupidity are almost never covered by warranty. --me.
    51. Re:And that's the problem with corporations by SillySlashdotName · · Score: 1

      Let me clue you in how this works in many corporations.

      No clue needed. I have invested in several different companies over the years, and the annual reports are quite interesting.

      On several BoDs there are directors who are on 10 or more boards. Most were being paid around $30,000 per year to sit on the Board of Directors. If they are paid the same for each director position they hold, they are being paid over $300,000 for attending meetings each year. Most also were being given stock, stock options, or additional payments for committee meetings, raising the total they are paid.

      The CEO and other officers pay, perqs, and benefits were laid out in detail in the annual report, but the finances of the Board of Director members was not. As far as I know, there is no financial reporting requirements for the members of the Board of Directors of any company.

      So (bringing this back on topic) there is no legal liability, no financial reporting requirements, and potential of income around a million dollars per year. I can get an MBA, I can get a legal education, I can become a doctor, I can plan and direct my carreer in many different directions; there is no carreer track to be a Board of Directors member.

      Just as with experience (most jobs require experience, if you have no experience you can not get a job to get experience so you can get a job!) the way to BECOME a director is to ALREADY BE a director.

      --
      Acts of massive stupidity are almost never covered by warranty. --me.
  2. left with no one to sue by YrWrstNtmr · · Score: 5, Insightful

    The hospitals, which initially reported their breaches separately, were left with no one to sue."

    I'd start with the ex-CEO. The 'company' did not make decisions, people did. They should be held accountable.

    1. Re:left with no one to sue by EXMSFT · · Score: 1

      It depends on the type of organization it was, and where it was founded. Like it or not, forming a corporation or LLC is often done to specifically shield founding/leadership individuals from liability of the company. And to a large extent, it does.

    2. Re:left with no one to sue by Anonymous Coward · · Score: 1, Insightful

      I'd start with the ex-CEO. The 'company' did not make decisions, people did. They should be held accountable.

      Not if they're a corporation.

      People think that anti-corporation people are all hippies who want every business to be a small business. Not the case at all. I'm very anti-corporation, not because I care about size (which I don't), or care that they're putting small business out of business (because I don't care: the big guys give me a better price).

      Rather, it's because when a small business messes up, people are held liable.

      When a corporation messes up, NO ONE is held liable, except in extreme cases. The "corporation" is itself a legal entity, just like you or I, which absolves the responsibility for the actions of the people who work for it. This is bullplop. If I personally sell something that has a lethal defect, why can't I just wave my hands and absolve myself of the consequences? Is it because I don't have enough employees or because I don't have stock? Or is it because the government created the legal entity known as the "corporation" for the express purpose of shielding wealthy people from the consequences of bad business?

    3. Re:left with no one to sue by Gordonjcp · · Score: 2, Interesting

      (because I don't care: the big guys give me a better price).

      Do they really? Remember that the price is rather more than a number written on a ticket - you need to look at the value of what you're buying too. For instance, I buy most of my groceries in small independent shops rather than supermarkets, because I get better value for money. Yes, the number at the bottom of the receipt is a little higher, but the quality of the produce is much higher.

    4. Re:left with no one to sue by westlake · · Score: 1
      forming a corporation or LLC is often done to specifically shield founding/leadership individuals from liability of the company.

      Well, duh. Limited liability company

    5. Re:left with no one to sue by bepo · · Score: 2, Interesting

      I'd start with the ex-CEO. The 'company' did not make decisions, people did. They should be held accountable.

      If accountability is what you want then why are you looking at the CEO? Shouldn't the technician who left the router down be personally liable? You could say that the CEO had the responsibility for ensuring methods were in place to prevent this. You could also say that the data was the responsibility of the hospital and paying a contractor does not eliminate that responsibility.

    6. Re:left with no one to sue by archen · · Score: 1

      Yes they typically do. Look closely at what you are saying; you are looking at VALUE not necessarily price. Smaller businesses often have better quality, service, value, whatever - yet it's the domain of the big business (ala Wallmart) that can leverage its sheer mass for lower prices due to scale. Some times this is unintuitive to people. If you buy cheap crap paint, and it takes you more than twice as much paint, did you really save 30% compared to the more expensive paint? Yet people will still buy the cheap paint because it's cheaper.

    7. Re:left with no one to sue by pthor1231 · · Score: 1

      This definately can be true of some categories of products, but not in others. For instance, TVs. The local guy has control over the quality of the TV, the is entirely up to the manufacturer, which is exactly the same situation the big guy is in. The only difference is that the bug guy gets a bulk discount, whereas the small guy doesn't. So in some situations, yes, but in some, no.

    8. Re:left with no one to sue by Anonymous Coward · · Score: 0


      >When a corporation messes up, NO ONE is held liable, except in extreme cases.

      "Extreme cases", including any situation where crime is committed, or criminal damage results. People who took actions, who knew actions were taken, or in many cases, who "should have known" that actions would lead to criminal damage, can be held criminally responsible, with no protection from the shield of "the corporation." HIPAA violations constitute criminal damage. The CEO who knew or should have known about the problem, can and maybe should go to prison.

  3. Nice by catdogven · · Score: 2, Funny

    This is another of the many advantages of outsourcing...

    --
    It's never too late to stop doing something wrong, or to start doing something right.
  4. Can't pass the buck by nicolaiplum · · Score: 5, Insightful

    You can outsource work but you can't outsource responsibility.
    And if you think the supplier will always be around to sue later, and suing them is your only plan, you're a fool.

    --
    "For a successful technology, reality must take precedence over public relations, for Nature cannot be fooled"
    1. Re:Can't pass the buck by Keys1337 · · Score: 2, Insightful

      you can't outsource responsibility.

      What's that thing called insurance do?

    2. Re:Can't pass the buck by AndersOSU · · Score: 1

      I think Matel agrees.

      As often as they blame a "rogue supplier" everybody is still going to blame them for lack of oversight, and rightfully so.

    3. Re:Can't pass the buck by HangingChad · · Score: 1

      You can outsource work but you can't outsource responsibility.

      Oh, yeah? Let's ask Karl Rove.

      --
      That's our life, the big wheel of shit. - The Fat Man, Blue Tango Salvage
    4. Re:Can't pass the buck by Colin+Smith · · Score: 1

      It outsources risk, not responsibility.

      --
      Deleted
    5. Re:Can't pass the buck by Anonymous Coward · · Score: 0

      Mattel's own toy design leaving the magnets able to be dislodged and swallowed, correctly implemented by the Chinese supplier, was responsible for the huge bulk of their recent recall. They deserve the blame.

    6. Re:Can't pass the buck by Keys1337 · · Score: 1

      It outsources risk, not responsibility.

      So when someone makes a claim against an insurance policy, the insurance company pays or doesn't pay without considering responsibility? Or if they don't pay and it goes to court, responsibility still isn't considered?

  5. Capitalism Rules! by FatSean · · Score: 3, Insightful

    Lots of people on slashdot extoll the virtues of un-fettered capitalism. "No need for government regulation, sue those who breach their contract!". Unfortunately, when the company folds protecting the stakeholders there is nobody left to sue! Oooops! There goes that darn accountability!

    --
    Blar.
    1. Re:Capitalism Rules! by peragrin · · Score: 3, Informative

      But it's governement regulations that have made it that way. the BOD of corporations should be ultimately responsible for the actions of the entire company. Since Corporations are a government protected body by removing the regulations protecting them opens the BOD up to others.

      --
      i thought once I was found, but it was only a dream.
    2. Re:Capitalism Rules! by marx · · Score: 2, Insightful
      That's the whole point of a corporation though (Wikipedia):

      A corporation is a legal entity (technically, a juristic person) which has a separate legal personality from its members.
      If you take away the property that the members aren't personally liable, then it's no longer a corporation, but some other type of organization.
    3. Re:Capitalism Rules! by Hatta · · Score: 0, Redundant

      Right, so get rid of corporations. That's what the OP was trying to say in the first place.

      --
      Give me Classic Slashdot or give me death!
    4. Re:Capitalism Rules! by CmdrGravy · · Score: 3, Insightful

      Right, so then no one forms a company to do anything at all, no capital can be raised and nothing gets done.

    5. Re:Capitalism Rules! by thc69 · · Score: 4, Insightful

      Unfortunately, when the company folds protecting the stakeholders there is nobody left to sue! Oooops! There goes that darn accountability!
      Eh? The company was destroyed. If you think the company should be punished, is there any better punishment? Isn't this a good thing? It means that the company is not going to do that again. Maybe it would satisfy people if the guy killed himself?

      Can he magically make the security breaches un-happen?

      At most, if the company stayed around, it could be sued for the costs involved in the cleanup -- but the only winners there would be the lawyers.
      --
      Procrastination -- because good things come to those who wait.
    6. Re:Capitalism Rules! by nmx · · Score: 4, Informative

      Eh? The company was destroyed. If you think the company should be punished, is there any better punishment? Isn't this a good thing? It means that the company is not going to do that again.

      Yes, but nothing's stopping these people from forming a new company and doing the same thing again.

      --
      "Well kids, you tried your best, and you failed. The lesson is, never try."
    7. Re:Capitalism Rules! by Opportunist · · Score: 4, Insightful

      Like you could sue a corporation when it still exists.

      Take Sony and the distribution of malware with its CDs. A person (read: human being) would be doing time for it. Read the law. Creation and distribution of malware on a commercial premise. Fits like a glove in this case. Punishable, depending on your country, with up to 10 years in jail. Especially when you can credibly claim that the person in question actually did pursue commercial interests (which is trivial in this case).

      But you can't do that to an international corporation! First of all, how do you imprison Sony? And think of all the jobs! And think of the tax (yeah, right, like I didn't pay more tax than Sony, in percent of my income...). And think of the political...

      Bullcrap. In a nutshell, corporations are above the law. They can break them as they want and if anything, they get a waggle of a finger and a puppy eyed "please, please don't do it again, mmmkay?"

      --
      We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
    8. Re:Capitalism Rules! by jkabbe · · Score: 1

      Being part of a corporation doesn't excuse an individual from liability for their own torts. Some people might want to go after the investor because the employee who screwed up probably doesn't have much money to go after. But, if the investor was passive or not involved day-to-day, how can anyone seriously suggest that they should be held accountable? That would mean getting rid of corporations and limited liability altogether (which would do wonders for investment).

    9. Re:Capitalism Rules! by Opportunist · · Score: 1

      Unfortunately the termination of a corporation does not entail the termination of the people responsible for it.

      --
      We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
    10. Re:Capitalism Rules! by loginx · · Score: 1

      Under a false identity, maybe, but otherwise, good luck raising financing when your name is on every investor's black list.
      Hopefully the CEO will just end up flipping burgers for a living from now on.

    11. Re:Capitalism Rules! by Draknor · · Score: 4, Interesting

      Yes, but nothing's stopping these people from forming a new company and doing the same thing again.

      1. Assuming the new company needs capital investment, they have to convince someone to invest. If investors don't do their homework, then they have only themselves to blame if the investment goes south (as presumably this one did).

      2. If you contract with that new company without doing a little bit of background research, and your data gets exposed next time -- well, I guess that means selecting a vendor wasn't important enough to take the time to do it right, correct?

      3. The IT mistake was not intentional / malicious, it was a mistake. While that should be a black mark on the reputation of former employees / owners, it shouldn't prevent them from ever working again; they just have to convince investors / clients that they have learned from that mistake and have policies / procedures in place to prevent it from happening again (assuming said investors / clients actually do their homework & check the vendor's reputation).

      I'm guess that means your corporate reputation goes out the window, for not doing sufficient research on vendors for critical services.

    12. Re:Capitalism Rules! by SpazMoose · · Score: 1

      So, you would like to get rid of pretty much every company in the stock market, causing the stock market to spiral downward, which would result in the government printing more money to pay its debt, thus devaluing the dollar (and making your money basically worthless), sending the majority of people into poverty, and making the nation into a third world country.

      Right, so get rid of corporations.

      Indeed.

    13. Re:Capitalism Rules! by johneee · · Score: 1

      And it could be back in a week or less as Verus 2007 Inc. No liability whatsoever for the new company, but could have the exact same people involved and they could purchase the assets of the old company.

      Happens all the time with builders.

      --
      - ------- There are ten kinds of people in the world. Those who understand binary, and those who... Huh?
    14. Re:Capitalism Rules! by letxa2000 · · Score: 2, Insightful

      Someone: If you take away the property that the members aren't personally liable, then it's no longer a corporation, but some other type of organization.

      Someone else: Right, so get rid of corporations.

      Forget that! It's a vicious circle. Aside from it not being easy to get funding, investments, loans, etc. as an individual for business purposes, in this sue-happy society we live in, someone would have to be almost crazy to launch a business under their name. I have my own business and I stand behind my products and services and, to-date, no-one has even threatened to sue me. But that doesn't mean it will never happen or that there will never be a complete jerk of a customer that decides to litigate something that should just be worked out between the two parties.

      Despite my best intentions and best efforts, there's no way I'm going to bet my family's economic future on whether or not some *sshole is going to launch a frivolous lawsuit. Which is why I have a business to protect me from personal liability. Not because I'm trying to avoid responsibility, but because it's dangerous to do business any other way.

      If we could get some reasonable legal reform passed to reduce lawsuit (perhaps as simple as "loser pays, plus some extra amount to the winner for time and trouble"), then perhaps we'd have fewer absurd lawsuits and at that point it'd be reasonable to talk about holding individuals more legally and personally responsible even if there's a corporate shield. But for the time being, no way. The corporate shield might occasionally protect the bad guys, but it also protects millions of well-meaning entrepreneurs from vicious and frivolous lawsuits that could threaten their family which, in turn, would reduce the number of entrepreneurs. And that'd be a BAD thing.

    15. Re:Capitalism Rules! by Anonymous Coward · · Score: 0

      My last company completely folded like that. Left a ton of debt with no assests for them to recoup their losses. few hundred people laid off (turned out too that some people got cheated on their medical insurance they were paying on and now have 32K bills uncovered) Same group of managers started a brand new company doing the exact same thing in the building that was next door, they even bought a large bulk of the old equipment from the old company before it went on auction.

    16. Re:Capitalism Rules! by Anonymous Coward · · Score: 0

      Do you have proof that without companies no capital can be raised?

    17. Re:Capitalism Rules! by cayenne8 · · Score: 2, Interesting
      "Right, so get rid of corporations. That's what the OP was trying to say in the first place."

      Well, that's not a great thing actually. The vast majority of companies and businesses are SMALL businesses. If you take that shielding away, you'd open up most businesses that are small, mostly private individuals, and you'd have them risking personal bankruptcy and ruin, for even minor problems.

      No one is going to risk their families welfare that way, and you'd kill small businesses in the US. For a person to take risks and be small business, which employs the majority of US citizens, they need to have some personal protection from liability.

      Especially given the litigious society we now live in...

      --
      Light travels faster than sound. This is why some people appear bright until you hear them speak.........
    18. Re:Capitalism Rules! by MightyMartian · · Score: 3, Insightful

      Get rid of the notion of limited liability for corporate officers. Simply alter corporate law so that corporate officers can be held directly accountable, so that when Mega-Chemical Corporation spills toxins into public drinking water, not only is the corporation taken to the cleaners, but the officers of the company are also taken to the cleaners. Thus, even if Mega-Chemical Corporation folds, we can still get our pound of flesh out of the officers.

      I'd wager it would be a boon for corporate governance if these turkeys knew that they would feel the weight of full liability.

      --
      The world's burning. Moped Jesus spotted on I50. Details at 11.
    19. Re:Capitalism Rules! by CodeBuster · · Score: 1

      Please mod the parent up, he is exactly right.

    20. Re:Capitalism Rules! by Artifakt · · Score: 1

      Partnerships, Sole Proprietorships, and variants on traditional incorporation, like S-Corps. All have differing liability standards. Plus the FDIC and banking structure is what lets most capital get raised, and the rest is affected chiefly by inheritance taxes, not corporation law - you're posting about how there can be things for capital to be applied to, not initially raised.

      --
      Who is John Cabal?
    21. Re:Capitalism Rules! by RexRhino · · Score: 1

      Lots of people on slashdot extoll the virtues of un-fettered capitalism. "No need for government regulation, sue those who breach their contract!". Unfortunately, when the company folds protecting the stakeholders there is nobody left to sue! Oooops! There goes that darn accountability!


      Do you think you would be able to sue the Social Security Administration, or the U.S. Army, or any other government agency if your private information was exposed by them? Well it has happened, and no, you can't sue. Sovereign immunity!

      But the government has a flag, and a national song, and they can shoot you if they want, so it is like totally OK and progressive for them to be beyond accountability!
    22. Re:Capitalism Rules! by RexRhino · · Score: 3, Insightful

      Yes, but nothing's stopping these people from forming a new company and doing the same thing again.


      Of course there is... the fact that they lost their shirts and destroyed their reputations pretty much means they are never going to start another company providing the same services ever again!
    23. Re:Capitalism Rules! by CmdrGravy · · Score: 1

      Yes, if anyone owning, or part owning, a company is liable for any mistakes that company makes then no one is ever going to invest money in companies.

      It was the invention of the limited liability company which has driven basically all of the worlds and societies progress since it was invented 2 or 3 hundred years ago.

    24. Re:Capitalism Rules! by RexRhino · · Score: 1

      Unfortunately the termination of a corporation does not entail the termination of the people responsible for it. So you think failing to prevent a SINGLE security breach should be a capital offense?

      Do we get to get to terminate any number of government agencies that have had security breaches, for failing to have perfect security?

      Just how good is the security on your box? Want to give us an IP and let us find out?
    25. Re:Capitalism Rules! by RexRhino · · Score: 3, Interesting

      Bullcrap. In a nutshell, corporations are above the law. However, the alternative to corporations: Government controlled monopolies, are also above the law (try suing the Social Security administration or IRS for compromising your data!!). And the police and justice system that is supposed to "regulate" the corporations are above the law (or do you expect the FBI to be abolished and the President to go to prison for those illegal wiretaps they were doing?!).

      All large social entities: governments, corporations, religions, are above the law, because the concepts of law and justice apply to individuals, not masses of people.
    26. Re:Capitalism Rules! by mccabem · · Score: 1

      That view is more than a little naive. Remember: Capitalism thrives on corruption.

      Maybe the guy won't be featured in Fortune magazine anytime soon (think he cares?), but that won't stop him from getting another (rube) investor with more money than they know what to do with.

      -Matt

      (BTW, for all we know his investors still made a pile of money on the deal.)

    27. Re:Capitalism Rules! by darth+dickinson · · Score: 1

      Didn't you just describe Sarbanes-Oxley?

    28. Re:Capitalism Rules! by Opportunist · · Score: 1

      Do I hold your medical history? Do I hold your personal data? No, and if I did, I would most certainly not put them on a network that is physically connected to one that can be accessed by people who have no business in there.

      You want my data, you're responsible for it. I don't want your data for exactly that reason. If you want to have data, you're responsible for what happens to them.

      --
      We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
    29. Re:Capitalism Rules! by Opportunist · · Score: 1

      And that's how it should be? They are just as much prime candidates for liability.

      --
      We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
    30. Re:Capitalism Rules! by bob_herrick · · Score: 1

      Speculating here, but assuming some degree of prudence on the part of the managers, there will be one or more professional liability insurance policies that will survive and become assets of the bankrupt estate. If that speculation is correct, there will be someone and something to sue.

    31. Re:Capitalism Rules! by Anonymous Coward · · Score: 0

      Under a false identity, maybe, but otherwise, good luck raising financing when your name is on every investor's black list.

      So, we have a company with exactly one major investor, who withdrew all of the company's money at the last second and let the company shrivel up and die?

      Can you say "shell corporation"? I thought you could. They don't need "every" investor, they just need the parent company to spawn yet another shell.

    32. Re:Capitalism Rules! by Anonymous Coward · · Score: 0

      1. Assuming the new company needs capital investment, they have to convince someone to invest. If investors don't do their homework, then they have only themselves to blame if the investment goes south (as presumably this one did).

      It is well known that investors will more likely invest in a company of a person who has once had a corporation, whether the corporation did well or not. This was taught by the VC's themselves. I once had a class in college where a VC was invite to speak and he specifically mentions that fact. Why? Supposedly someone who has experience with managing a business will do a better job a second, third, fourth or fifth time around.

      2. If you contract with that new company without doing a little bit of background research, and your data gets exposed next time -- well, I guess that means selecting a vendor wasn't important enough to take the time to do it right, correct?

      That's correct in theory, but depending on how they arrange the second corporation, how are you going to find out? How much research is considered sufficient research?

      3. The IT mistake was not intentional / malicious, it was a mistake. While that should be a black mark on the reputation of former employees / owners, it shouldn't prevent them from ever working again; they just have to convince investors / clients that they have learned from that mistake and have policies / procedures in place to prevent it from happening again (assuming said investors / clients actually do their homework & check the vendor's reputation).

      I'm guess that means your corporate reputation goes out the window, for not doing sufficient research on vendors for critical services.

      It may have been a mistake, but how do you know if people in the corporation didn't already know about it and purposefully hid that fact. Maybe that may be the real reason why the company quietly closed down. We won't know until they are investigated as they should be. If it was indeed an honest mistake, then those employees and the founders are off the hook. They'll also learn from their mistakes. If they knew they had security holes and hid the fact, they should be prosecuted to the full extent of the law.

      The problem here is that Computer programmers are not engineers. Engineers are licensed and held liable for failures in the structures they design, until they die. They must prove that their calculations for the skyscraper/bridge/car/rocket/etc... were not faulty or inadequate. This pushes engineers to "over-engineer" their structures. When there is a failure, teams of engineers are sent in to diagnose the failure in order to prevent future engineering failures, and also determine if someone is at fault.

      Poor programming in critical infrastructure has no similar onus. Fly by night programming companies are the norm. No one is held liable for the programming failure. We end up with crap software or crap web security. It seems that much of the programming grew from video games, where bugs are not critical, and companies don't care, and late night cram sessions to finish the software is the normal state of affairs.

      This all comes from the college culture of late night, cram session hacking. I see it all the time with students cramming for their projects, which means spaghetti like code and quick hacks to solve the immediate problem. The entire concept of "engineering" is lacking from Software engineering. The engineering aspect is glossed over in every school. A single quarter or single semester of Software engineering is not sufficient. Instructors need to instill the software engineering aspect into each and every CS class, or we will continue to have this piss poor security in every software package.

      Poor security programming does affect a lot of other people. The programmers should be held accountable even if it is a mistake. It means they are not

    33. Re:Capitalism Rules! by WNight · · Score: 2, Insightful

      So people shouldn't be able to write their liability off on the chance of there being someone else to pass the buck to later. These hospitals are now discovering where the liability stops...

      If the hospitals had thought they were on the hook for the results of these systems they'd have demanded far simpler ones they could audit. Instead they buy a more complex system because of lies about its safety. This makes it almost impossible for honest firms to compete. If you discuss security issues you sound like more of a risk than the people who hand-wave them away.

      Well, companies that haven't been burned don't realize the value of proper design. Just like people who've never witnessed a bridge collapse are reluctant to spend more for a sturdier design.

    34. Re:Capitalism Rules! by Bearhouse · · Score: 1

      Agree with the emotion, but reality is different - for a reason. Has Sarbanes-Oxley 'worked'? The jury is still out...
      SOX was designed to prevent another Enron-style meltdown, but look what's happening in the subprime mortgage market. Billions wiped out, but 'nobody is to blame'...

      As pointed out in other posts, corporate officers can be directly held liable for actions where they knowingly break the law. OK, they often get out of it, but that's more a fault of the legal system than the letter of the law.

      Now, regarding the scope of responsibility of corporate officers, there's a big difference between bosses knowingly breaking the rules / law, (aka Enron et al), and simple incompetence. When I was running my own IT company, should I have been personnally liable for every screwup of my team? Especially when said screwups were a result of not following clear policies and procedures?

      The bottom line? We lost, (I walked away from), plenty of business where we were 'too expensive'. I know why - those policies and procedures (and internal and external audits) cost money. Someone's gotta pay, and in a commercial environment, that means the client, in higher prices, or the shareholder, in lower returns. Ummm...so that would be higher prices then. Since there's always some dickhead client who wants to 'save' money by buying 'cheap', there will always be incompetents and crooks waiting to sell them something that should cost $100 for $50.

      When it all goes to shit, who's to blame? The supplier, or the customer? In my opinion - BOTH!

    35. Re:Capitalism Rules! by thomas.galvin · · Score: 3, Interesting

      Unfortunately, when the company folds protecting the stakeholders there is nobody left to sue! Oooops! There goes that darn accountability!


      Eh? The company was destroyed. If you think the company should be punished, is there any better punishment? Isn't this a good thing? It means that the company is not going to do that again. Maybe it would satisfy people if the guy killed himself?


      The problem with that is that a corporation is kind of an ethereal entity to begin with: it never really existed, except as an abstract concept, so "punishing" it is kind of meaningless.

      Here's an analogy. Steve is a plumber. You hire Steve to replace the pipes in your house. Instead, he screws up so badly that you can no longer live in your house. You go to sue him, but he says "sorry, I'm not Steve any more. You can call me Frank, and you can't sue me, 'cause I'm not Steve."

      That's basically what's happening here. The people responsible for this cannot be held accountable, because they no longer call themselves Careless, Inc.

      IANAL, YMMV, HAND, etc, ad infinitum.
    36. Re:Capitalism Rules! by caspper69 · · Score: 1

      SOX was designed to prevent another Enron-style meltdown, but look what's happening in the subprime mortgage market. Billions wiped out, but 'nobody is to blame'...

      When it all goes to shit, who's to blame? The supplier, or the customer? In my opinion - BOTH!


      Well, you hit the nail on the head at the end. It's not that 'nobody's to blame' in the subprime debacle. It's that EVERYONE is to blame. From the homeowner's that wanted/needed the loans, to the brokers that wanted to make money off those borrowers, to the lenders that wanted to underwrite those loans so they could in turn sell them to the institutional investors as securities who wanted to make a fortune off of them. The whole system is to blame.

      Oh, and just watch... These same people are STILL going to make a killing in the subprime mortgage market. Now those 14% default rate securities aren't worth shit on the open market because no one wants to buy them. But someone will buy them, and that someone will make a stinking fortune on them. All this is is money changing hands from one conglomerate investor to another with the real loser being the small guy on the street with his 401(k) or mutual funds. All the hype over the subprime crash (which in and of itself represents less than 10% of the entire mortgage market) is nothing more than a chicken little scam, and Americans are eating it up and preparing for a big loss.

    37. Re:Capitalism Rules! by WNight · · Score: 1

      Theoretically, the treatment of company executives should be the same. Either they're found guilty and not protected, or they aren't found guilty and there's nothing to protect them from.

      And of course it's the dominant business pattern, it's the best for those who run businesses. But if it weren't available, 100% of businesses would have a different charter. Society has benefited during this time, as well as the business owners, but that doesn't mean that limited liability is *the* reason. Liability is carried somewhere, if not on the people that caused it, then on society as a whole.

      Essentially, limited liability is non-capitalist. It's corporate welfare, externalizing the costs of business by letting society as a whole bear them.

      However, we've found that a small reduction in absolute capitalism (helping losers to avoid debtors prisons and starvation, etc) increases willingness to participate in risk and thus provides a healthier economy. It's not the investors that deserve the pat on the back for their investments, after all, the rest of society is carrying all of the risk of failure, leaving investors to only cover their opportunity cost.

    38. Re:Capitalism Rules! by HiThere · · Score: 1

      If it's a "natural monopoly", then it *SHOULD* be run by the government as a public service. By natural monopoly I mean things like physical infrastructure. Roads, water pipes, electrical wires, etc.

      If it's not a natural monopoly, then the government _should_ act to decentralize the power. Should doesn't mean does. Perhaps a tax factored by n*log(n) where n = the number of employees (including in employees contractors who work for more for this company than for anybody else during a quarter [month? week?]).

      It's not clear to me (for certain) that the provision of water should be a government responsibility...but the maintenance of the pipes and sewer systems certainly should. (N.B.: maintaining the pipes requires physical access.)

      Government controlled monopolies and government facilitated monopolies have not uniformly proven disastrous... but by far the largest number of them have.

      --

      I think we've pushed this "anyone can grow up to be president" thing too far.
    39. Re:Capitalism Rules! by f1055man · · Score: 1

      Moral hazard. Because a corporation can only lose its initial investment, risk/benefit analyses are skewed.
      I can lose more than my investment and opportunity cost of continued operations because I'd be held liable for damages to others. Individuals are naturally more conservative than corporations when it comes to risk. This is mostly a good thing. Being conservative due to the risk of failure isn't a good thing (a corporation won't starve it fails), but being conservative due to the risk of damaging others is a good thing. Damages don't disappear when the corporation that caused them disappears.

      I think I'll incorporate f1055man, LLC so that when I fuck up I can blame it on the corporation.

    40. Re:Capitalism Rules! by PPH · · Score: 1
      From TFA:

      and caused Verus' primary investor to pull the plug. The hospitals, which initially reported their breaches separately, were left with no one to sue.

      What exactly is this plug-pulling thing? How can I take advantage of it as an individual whenever I screw up?


      Seriously, investors in limited liability companies might be able to walk away from their investment and suffer no additional damages. But I'd venture a guess that the 'primary investor' was more closely involved in Verus management decision-making process. Not only should they not be able to walk away, they might be liable for losses incurred by smaller investors.

      --
      Have gnu, will travel.
    41. Re:Capitalism Rules! by WindowlessView · · Score: 1

      For a person to take risks and be small business, which employs the majority of US citizens, they need to have some personal protection from liability.

      Most small business are not corporations but rather sole proprietors or some kind of partnership. It usually doesn't make sense for a small biz to incorporate because of the tax implications. Since the business is the family's primary means of income they would have that income taxed at the corporate level and then taxed again at the income tax level when they paid themselves. Until a company grows to a certain size incorporation doesn't really make financial sense. Of course there are variations on this like S-corps and the like so nothing is cut and dried.

      --
      Leave the gun, take the cannolis.
    42. Re:Capitalism Rules! by Opportunist · · Score: 1

      Well, I'd take it a step further. Everything needed to run a business (power, gas, light, water and maybe public transport as well) should be government controlled (at the very least the prices), to create a level play field. Actually, everything else is anti-free market.

      The reason is simple: If you're a large corporation and you use a fair lot of resources (usually you do), the discount you get is usually a decisive advantage over any smaller competing company.

      This can go to amazing lengths. I know of a case where a large company managed to get the public transport system (which is actually better in many parts of Europe than the US, thus more used) to reroute its busses to stop right in front of their outlets and move the stops away from competing shops. It looked silly at first, but it was an eye opener for some businesses.

      The same applies to power and water. You use more, you get a discount. To the point where you pay only insignificantly more than your competitor who uses about half your resources (and, in a way, pays for your resources that way).

      --
      We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
    43. Re:Capitalism Rules! by Bearhouse · · Score: 1

      Yeah, you know this old joke?

      A young banker is taken down to the marina for lunch on his boss's boat.

      His boss shows him around the magnificant vessel, and then waves his hand around the port...

      "Over there are my fellow board-members' yachts, on the right there, that's where ours lawyers ones are, and straight ahead you have the ones belongings to the partners from our auditors..."

      The young guy asks, "excuse me, but where are our clients' boats?"

    44. Re:Capitalism Rules! by Anonymous Coward · · Score: 0

      > Despite my best intentions and best efforts, there's no way
      > I'm going to bet my family's economic future on whether or
      > not some *sshole is going to launch a frivolous lawsuit.

      I see, so you don't really believe in what you're doing. You're
      just out to make a quick buck and screw society. If your company
      folds then your investors lose REAL money, and THEIR family's
      economic future is jeopardised, but that's OK because you're in
      the clear.

      Sickening.

    45. Re:Capitalism Rules! by Anonymous Coward · · Score: 0

      I don't know what country you live in but in mine, the government is by no means above the law. There are institutions providing oversight to whom you may take complaints and even if they fail, you can go directly to the department and the minister if need be.

      And all that's -before- the courts get involved where it's perfectly possible for a private citizen to sue the government without becoming a financial cripple.

      How's that "land of the free" thing working out for you?

    46. Re:Capitalism Rules! by jollyreaper · · Score: 1

      Get rid of the notion of limited liability for corporate officers. Simply alter corporate law so that corporate officers can be held directly accountable, so that when Mega-Chemical Corporation spills toxins into public drinking water, not only is the corporation taken to the cleaners, but the officers of the company are also taken to the cleaners. Thus, even if Mega-Chemical Corporation folds, we can still get our pound of flesh out of the officers.

      I'd wager it would be a boon for corporate governance if these turkeys knew that they would feel the weight of full liability. Silly boy, you can't attract Top Talent if you're also going to hold them accountable for their actions! No, the only way to attract Top Talent to run these corporations is to give them complete immunity to the consequences of their mistakes. What, what's that, you say? Top Talent shouldn't be making big mistakes? No, no, no. It's not about mistakes, it's about gambling. They run the company on the edge of disaster to maximize profit, sort of like that mine you've been hearing about. But when disaster does happen, the trick is to get out quick before anyone can pin the blame. Sure, you may see a couple of unlucky people get pinned as scapegoats but the most important investor-types get out free and clear. And that's how business is done in these great United States!
      --
      Kwisatz Haderach
      Sell the spice to CHOAM
      This Mahdi took Shaddam's Throne
    47. Re:Capitalism Rules! by cayenne8 · · Score: 1
      "Most small business are not corporations but rather sole proprietors or some kind of partnership. It usually doesn't make sense for a small biz to incorporate because of the tax implications. Since the business is the family's primary means of income they would have that income taxed at the corporate level and then taxed again at the income tax level when they paid themselves. Until a company grows to a certain size incorporation doesn't really make financial sense. Of course there are variations on this like S-corps and the like so nothing is cut and dried."

      I gotta disagree with you....if you run a small business incorporating IS the best idea for getting the tax breaks!! An S-corp is perfect for this (I did one myself to do my contracting work through...one employee, me).

      I'm not sure, but, I think a LLC works the same way. Yes, it makes a bit more paperwork, but, the tax benefits are fantastic. You don't do a C corp until you are large enough for it to make sense....but, it is a fantastic idea to do the S corp..so you can pay less SE taxes...and write of damned near everything you do for business. The mileage for cars alone helps out greatly!!

      Anyone that goes the partnership or sole proprietor, either got bad advice or is ignorant IMHO....lack of tax shelters and being open to personal liability....whew...not a good idea.

      --
      Light travels faster than sound. This is why some people appear bright until you hear them speak.........
    48. Re:Capitalism Rules! by RexRhino · · Score: 1

      I don't know what country you live in but in mine, the government is by no means above the law. There are institutions providing oversight to whom you may take complaints and even if they fail, you can go directly to the department and the minister if need be. "Dude! My country (which I can't mention, lest you show me evidence otherwise!), is like so totally perfect and democratic and superior. If I, like, told you which country I am from (which I won't), you would see how democratic and uncorrupt we are! But you will just have to realize, that my un-nameable anonymous country is like so totally rockin!"

      Sure buddy, keep watching your state-run news and believing the hype!
    49. Re:Capitalism Rules! by Anonymous Coward · · Score: 0

      People should not be punished for crimes they commit:

      1. Assuming the person needs money, they have to convince someone to hire them. If employers don't do their homework, then they have only themselves to blame if the employee commits another crime (as presumably this one did).

      2. If you deal with that person without doing a little bit of background research, and your data gets exposed next time -- well, I guess that means selecting friends wasn't important enough to take the time to do it right, correct?

      Don't try to blow holes in my analogy, it's not an argument, just an easy way to show you how I think about this topic: companies need to be accountable too.

  6. HIPPA by morgan_greywolf · · Score: 2, Insightful

    HIPPA laws are no joke. There are serious fines and even criminal penalties for letting confidential patient records out. It's so serious that companies working with health care data often have special training programs for their employees that handle any sort of hospital data -- even for IT workers.

    Verus probably folded to keep from getting heavily penalized and/or to prevent its directors from being criminally prosecuted under HIPPA.

    1. Re:HIPPA by Jhon · · Score: 4, Informative

      There are serious fines and even criminal penalties for letting confidential patient records out.
      Great summary of HIPAA here.

      Covered entities and specified individuals, as explained below, whom "knowingly" obtain or disclose individually identifiable health information in violation of the Administrative Simplification Regulations face a fine of up to $50,000, as well as imprisonment up to one year.
      Notice that "knowingly" statement?

      Sorry, but I think you are wrong on the "probably folded to keep from getting heavily penalized and/or to prevent its directors from being criminally prosecuted under HIPPA". FTA, it's more likely they folded from lack of funding -- as their primary investor pulled out (most likely due to not wanting to tarnish THEIR name...

    2. Re:HIPPA by macz · · Score: 1

      Yeah, but who is responsible for enforcing HIPAA penalties, and how many have been levied for this yet? Is Phase 2 even complete?

      --
      ...But I digress. TREMBLE PUNY HUMANS!ONE DAY MY SPECIES WILL DESTROY YOU ALL!
    3. Re:HIPPA by GuyverDH · · Score: 1

      Don't forget about SOX.

      HiPPA, SOX - each with their own regulations, some of which contradict the other - hard to comply with 2 contradictory regulations, where each have stiff penalties.

      --
      Who is general failure, and why is he reading my hard drive?
    4. Re:HIPPA by RESPAWN · · Score: 1

      Notice that "knowingly" statement? There should still be an investigation to make sure that somebody didn't "knowingly" leave the firewall open to allow this to happen. "Knowingly" can have several meanings in this case, if the lawyers get to it. But, no. The hospitals won't gain any money out of this.
      --

      If Murphy's Law can go wrong, it will.

    5. Re:HIPPA by morgan_greywolf · · Score: 1

      SOX only deals with financial reporting for publicly-traded companies. AFAICS, the company in question isn't publicly-traded, and neither are many hospitals, many of them being either public sector institutions or non-profits.

    6. Re:HIPPA by GuyverDH · · Score: 1

      I was mostly making reference to companies that deal with insurance processing - many of which are publicly traded. Companies that do web hosting, call-centers, data processing will often find themselves having to contend with multiple sets of laws whose intent is to protect data, that when trying to comply with one set, makes the company non-compliant with the other set.

      --
      Who is general failure, and why is he reading my hard drive?
    7. Re:HIPPA by jc42 · · Score: 1

      HIPPA laws are no joke. There are serious fines and even criminal penalties for letting confidential patient records out. It's so serious that companies working with health care data often have special training programs for their employees that handle any sort of hospital data -- even for IT workers.

      But when you look into the software that implements it, you find that most of it is available only as a Windows binary. So maybe the laws aren't jokes, but the implementations are.

      (Hey, someone has to get in some MS bashing here. ;-)

      Actually, I'm not kidding. My wife works for a major HMO, in the "IT" part. She sees a lot of the medical records as part of software testing, and they try hard to follow the rules. I've been showing her things I read that are relevant to their security concerns. Needless to say, almost all the problems are with Windows-based systems. The supporters, as usual, claim that this is because nobody every uses any other OS. And this is quite true; she comments that she has no choice but to use Windows, because that's all they have at work. There are no problem with other systems because there are no other systems.

      If they were serious about the HIPAA security stuff, they wouldn't permit implementing it on top of the least secure platform that's available. The obvious conclusion is that it's all PR, with little actual concern with real security. (Much like airport security, y'know. ;-)

      --
      Those who do study history are doomed to stand helplessly by while everyone else repeats it.
    8. Re:HIPPA by jc42 · · Score: 1

      [W]ho is responsible for enforcing HIPAA penalties, and how many have been levied for this yet?

      Well, I thought I could get an answer quickly by googling for the obvious keywords. Nope. I found lots and lots of discussions and analyses by various legal and medical people, and even discussions of what it might mean for the IT people. I found several discussions of the Supreme Court's absurd decision that pharmacists are not Healthcare Providers, and are thus exempt from HIPAA rules. I found a few reports of people using HIPAA to block parents' learning about a child's medical records. There are a few "abstract appeals" in the works to clarify the rules. And lots of things like this discussion.

      But I didn't find any actual court decisions fining anyone for violating HIPAA rules. I wonder if I just haven't guessed the right keywords? You'd think that by now, there would be a few court cases, right? So where are they?

      [citations needed] -- Maybe I should make that my new sig.

      --
      Those who do study history are doomed to stand helplessly by while everyone else repeats it.
    9. Re:HIPPA by Jhon · · Score: 1

      The biggest bugga-boo with HIPAA right now is the fear of losing MediCare/MediCal reimbursement if you are found to be non-HIPAA compliant.

      Very little in the way of criminal/civil penalties.

  7. Well now... by MrNaz · · Score: 2, Insightful

    "The hospitals, which initially reported their breaches separately, were left with no one to sue."

    In this day and age, all I can say is BOO HOO.

    --
    I hate printers.
    1. Re:Well now... by Anonymous Coward · · Score: 0

      While I agree that someone should be held accountable, I also see where you're coming from on this. I think that the "lawsuits for everything" is long past the point of being really out of hand.

    2. Re:Well now... by Bardez · · Score: 1

      I agree, and I'm quite surprised to see the first of these sentiments so far down the page.

      --
      Perception is the thin dividing line between reality and fiction.
    3. Re:Well now... by Billosaur · · Score: 1

      The problem is, people are going to be suing the hospital for allowing their information to be let out into the wild. If Verus is no longer there for the hospitals to sue, then they don't stand to recoup any losses suffered when the plaintiffs win these lawsuits, and as a result the hospitals have to shell out hard-earned cash to make these people go away. End result: medical care costs go up or hospitals may close. Litigation is not always the answer, but in this case, it was the only way to make sure that the people who properly deserve the blame were held accountable. This does not absolve the hospitals completely, but it puts them and they people they serve in a bad spot.

      --
      GetOuttaMySpace - The Anti-Social Network
    4. Re:Well now... by hawkinspeter · · Score: 1

      The hospitals deserve to be in a tight spot/go out of business if they make such a poor decision about suppliers. If they bought some cheap syringes that gave everyone blood poisoning, they should be held accountable - why not hold them accountable for buying rubbish software?

      --
      You're a temporary arrangement of matter sliding towards oblivion in a cold, uncaring universe
    5. Re:Well now... by pev · · Score: 1

      "The hospitals, which initially reported their breaches separately, were left with no one to sue."

      In this day and age, all I can say is BOO HOO.

      Try saying that again, a little bit louder when you're being wheeled into a hospital in need of urgent medical care...

      ~Pev
    6. Re:Well now... by MrNaz · · Score: 1

      In my books, if you outsource something that is your responsibility to deal with, then you are responsible if the person you outsource to fucks it up. End the pass the parcel game of lawsuits and bring back good old taking responsibility for what you do.

      --
      I hate printers.
    7. Re:Well now... by Billosaur · · Score: 1

      Because while some hospital administrator/staffer might be knowledgeable in the ways of medical equipment/supplies, I seriously doubt they are savvy enough to know the ins and outs of technology. They probably put the job out to competitive bid, Verus won out, and installed their system. And let's not forget, it wasn't a failure of the system, per se, that led to this -- it was some mistake in handling the servers and the firewall. A hospital can't be held accountable for the stupidity of the staff of a vendor in a rea outside their expertise.

      --
      GetOuttaMySpace - The Anti-Social Network
  8. Start looking at MedSeek by faloi · · Score: 3, Interesting

    I would think that if Verus is referring people to an alternate service, there would be some sort of contractual agreement between the two. The investors might have to assume some liability for preventing legal redress of problems.

    For that matter, I would the federal government would be all over it for violation of HIPA regulations.

    --
    "It is a miracle that curiosity survives formal education." -Albert Einstein
  9. External security auditors were needed by Dekortage · · Score: 5, Interesting

    Read the article. It was a single mistake -- leaving a firewall down after performing a transfer of data from one server to another. But, why would you need to take down a firewall to transfer data? Set up a VPN, or better yet, use hard drives and old-fashioned sneakernet to transfer the data.

    What the vendor really needed was a security audit by an external security firm. I bet you will see more of that in its competitors (or ex-competitors).

    --
    $nice = $webHosting + $domainNames + $sslCerts
    1. Re:External security auditors were needed by Billosaur · · Score: 1

      What the vendor really needed was a security audit by an external security firm. I bet you will see more of that in its competitors (or ex-competitors).

      I bet you won't. Why? Because their competitors are slapping each other on the back, laughing themselves silly, and convincing themselves it won't happen to them, their IT guys aren't that dumb. Unfortunately, with the given state of IT talent, this is going to happen to one of them next -- not this precise failure, mind you, but something similar. Data security is a joke right now, and not just for hospitals. Until there is a universal outcry and until companies that cause data breaches are hit in the wallet hard, this kind of thing is not over by a long shot.

      --
      GetOuttaMySpace - The Anti-Social Network
    2. Re:External security auditors were needed by SatanicPuppy · · Score: 1

      Still stupid. What were they transferring with, unsecured Samba? Anonymous FTP? Windows File sharing? And why were they transferring files in the first place? Secure files should reside on one machine or cluster, with nightly (or whatever is appropriate) backups. Two locations = two times the security risk.

      Sometimes you have to take that risk (a redundant colo or something), but in that case you have a secure medium for file transfers and it should happen pretty damn often if not constantly ...Certainly not the kind of special occasion you would need to bring the firewall down for.

      Did I say you should never bring down the firewall? I know a guy who (in lieu of network troubleshooting) will plug his PC directly into the cable modem when he has networking issues; gets virused all the time. And why was there only one firewall between this system and unsecured systems?

      Sounds like these amatuers needed to go out of business.

      --
      ad logicam Claiming a proposition is false because it was presented as the conclusion of a fallacious argument.
    3. Re:External security auditors were needed by Dekortage · · Score: 1

      Yeah, but after all the back-slapping and laughing-themselves-silly, somebody is going to get the bright idea that a security audit would be a great marketing tool. "You should hire us because we're secure. Really -- just ask !" And some customers will notice.

      --
      $nice = $webHosting + $domainNames + $sslCerts
    4. Re:External security auditors were needed by Dekortage · · Score: 1

      Oops, that should have been: "just ask <security audit firm>!". Curse those HTML tag interpreters...

      --
      $nice = $webHosting + $domainNames + $sslCerts
    5. Re:External security auditors were needed by CodeBuster · · Score: 2, Insightful

      Turning off the firewall is not as uncommon as you might think, especially at smaller companies where the inexperienced network administrator (the company didn't want to shell out for a decent admin) is under pressure from above to just "make it work" or "turn off the firewall so that our sales drone can demo the product to a client". The managers attempt to override objections from the engineers with promises that, "it is only for 15 minutes" or other false assurances, as if the engineers are only issuing warnings because they like to put the manager in a pickle in front of the client. The proper response from the engineer in these cases is to get the request in writing from the low level manager that is asking for it...you would be surprised how quickly they back off when they are forced to authorize a request in writing to "turn off the firewall".

  10. Oh good god. by Lumpy · · Score: 0, Flamebait

    The hospitals, which initially reported their breaches separately, were left with no one to sue."

    OMG! Can we set up a paypal fund to help find someone for these hospitals to sue?

    boo fricking Hoo. Even IF the guys were still in business they were more than likely a LLC which means that you can sue them all you want it wont do squat, you wont get squat.

    I just love though how the summary makes it out how it's a horrible thing that the Hospitals cant sue anyone. Oh the Humanity!

    --
    Do not look at laser with remaining good eye.
    1. Re:Oh good god. by catbutt · · Score: 1

      I just love though how the summary makes it out how it's a horrible thing that the Hospitals cant sue anyone. Oh the Humanity! What is your point?

      What if it was worded "none of the responsible parties were there to accept the consequences" or "those that caused the problem escaped without repercussions, while others had to pay for the costs of their negligence"?
    2. Re:Oh good god. by Anonymous Coward · · Score: 0

      His point is clear to me.

      Companies that could afford to have it done in house anyways chose to cut costs and have a contractor do it. Their fault for not hiring a 3rd party to test what the contractor did.

      Every one of those hospitals should have paid to have a 3rd party test penetration of the product ESPECIALLY with the data and access involved. they chose not to because they needed the money for an executive golf outing or some other stupidly wasteful thing. Who is at fault? the executives of the hospitals. Let's sue them.

  11. See how far you'll get litigiously when... by ahuimanu · · Score: 3, Interesting

    The company is in India, or China, or Indonesia or.... you get the point.

    Hold your information close to your chest - there's a reason you used to pay a guy, an in-house guy mind you, the BIG BUCK$ to keep your information straight.

    But noooooo...

    We gotta OUTSOURCE because it looks good on a quarteryly statement.

    Stew in it boyos, STEW IN IT!

    --
    shock the monkey
    1. Re:See how far you'll get litigiously when... by canuck57 · · Score: 1

      We gotta OUTSOURCE because it looks good on a quarteryly statement.

      Yes, that is the bottom line!!

      Lets hope the courts don't let the hospitals "outsource" their responsibility in this for using contractors not practicing good security. Maybe next time the outsource, security will be in their minds. Maybe not just take the lowest bid.

    2. Re:See how far you'll get litigiously when... by Moozer · · Score: 1

      "We gotta OUTSOURCE because it looks good on a quarteryly statement."

      Actually outsourcing something like web design and hosting is a very sound IT decision for most health care organizations -- and not just for cost reasons. I mean think about it: Would a web hosting company employ a doctor to take care of their employees when they got sick? Of course not. That's because a web hosting company is supposed to be focused on web hosting, not providing health care. Conversely, a health care organization should be FOCUSED ON PROVIDING HEALTH CARE not web hosting.

      I work in IT at a medium sized health care organization in the midwest and I will freely admit we don't have the talent inhouse to design and administer our own web page. (Interestingly, I guess we beat the rush to MedSeek.) Sure we could employ a web designer and a good websever administrator, but there are a couple of reasons this wouldn't make much sense:
      - There really isn't enough work here to keep either of them busy most of the time
      - It's hard to entice qualified technical candidates to move to smaller towns and cities
      - It's difficult for most not-for-profit health care systems to pay the kinds of competitive rates that would bring in top tier staff

      It makes much more sense for us to pay a contractor who can hire technical experts (hopefully...) to run many websites all at once. Then our IT department can worry more about supporting clinical data systems, which gets back to focusing on health care. (And frankly, if we had been running our own site I'd bet that if we were trying to do things ourselves we would, at some point, have screwed up just as badly as Verus did -- it just wouldn't be such big news.)

    3. Re:See how far you'll get litigiously when... by db32 · · Score: 1

      I know I would much rather have the hospital spending a fortune on a highly paid IT staff of experts in every section of the many many many different vendors and operations of all the different pieces of technological things that go on on a hospital network. I mean...why would I want lowered health care costs? Or maybe the hospital should hire one less cardiologist, or pathologist, or something to make sure they can pay their IT staff.

      I certainly hope the courts don't let people "outsource" their responsibily for using a manufacturer not practicing good design building cars. People should have to take responsibilty and build their own car in their garage, it doesn't make sense to blame the mfg of the car because that person was dumb enough to buy from such a horrible mfg. These people should have sent their own QA and safety engineers to the factory first before they bought the car!

      Seriously grow up, this is stupid. I think outsourcing technical work when you are a technical company is a bit dumb and a sign of quarterly statement thinking. Outsourcing technical work when you are in the business of working on squishy things that scream and bleed is not dumb. You outsourced the building of your home, you outsourced the building of your car, and you can bet your ass that you would outsource the responsibilty of purchasing a faulty product to the builder/mfg if your home or car fell apart due to shitty procedures or materials used in its construction, as it should be.

      --
      The only change I can believe in is what I find in my couch cushions.
    4. Re:See how far you'll get litigiously when... by TheLink · · Score: 1

      Heh, but the great thing is despite all of the great stuff that's happening in US health care, it's still more expensive than in countries with better health care in Europe!

      --
    5. Re:See how far you'll get litigiously when... by db32 · · Score: 1

      Well...to be honest the whole problem isn't healthcare. It is a tangled web of problems, but it is pretty easy to trace the threads of it through the mess. Credit companies have caused an incredible level of inflationary spending because of the buy now pay later mentality that teaches people $100 less per month in payments is a good deal even when it means they pay $10,000 more over the life of the loan. Insurance companies are vile and evil beasts. Malpractice lawsuits, while good in theory, are generally becomming aweful in practice driving up costs and insurance. (Patients do need protection from negligence, however, we understand precious little about the human body, and no doctor is perfect.) Then we also have the cost involved in becomming educated and certified to work on squishy things that scream and bleed, and if you have EVER taken ANY college you are well aware of how much of a financial scam that mess is...$150 book that is on its 8th edition with minor changes but you can't use any previous edition.

      More than anything actually directly related to the healthcare industry, it is simply capitolism run amok. While I hate anything that would shift the blame from the corporate/government entities ultimately responsible...the fact is the American consumer deserves a great deal of the blame. As long as you give companies the dollars, they will do whatever they can to take more away from you. It takes large numbers of educated consumers to effectively control a capitolistic economy, and there is a GREAT vested interest in the commercial and government sector to keep the people uneducated.

      --
      The only change I can believe in is what I find in my couch cushions.
    6. Re:See how far you'll get litigiously when... by SorryTomato · · Score: 1
      Or the USA for that matter... see http://en.wikipedia.org/wiki/Bhopal_gas_tragedy

      If you can get away with killing 20,000 people without personal accountability, what the big deal about some bits and bytes?

  12. Can someone explain by Critical+Facilities · · Score: 1

    , all of the data losses can now be attributed to a single incident, in which Verus employees left a firewall down following the transfer of data from one server to another,

    I confess, I am not someone who works professionally in the IT field, so I may be off the mark here, but can someone explain a situation where a computer would need to have its firewall dropped totally merely to transfer data from one system to another? I guess it just sounds a little unusual to me. Is this a systemic flaw in the way these systems were being administered or is this someone leaving out an obviously crucial step in an otherwise routine operation?
    1. Re:Can someone explain by Mark+J+Tilford · · Score: 1

      One possible explanation is that there are difficulties with a computer behind one firewall communicating with a computer behind a different firewall.

      --
      -----------
      100% pure freak
    2. Re:Can someone explain by Dancindan84 · · Score: 3, Insightful

      can someone explain a situation where a computer would need to have its firewall dropped totally merely to transfer data from one system to another? A) Laziness (didn't want to set up a VPN or just open the necessary ports)
      B) PEBKAC (didn't know how to do the above, or at least do it properly)
      C) ID Ten T (knew how to do it, but didn't think it was a "big deal")
      D) Some combination of A, B and C
      --
      "Always forgive your enemies; nothing annoys them so much." - Oscar Wilde
    3. Re:Can someone explain by Lord_Frederick · · Score: 1

      In IT there is the correct way to do something, the cheap way and the easy way.

      Very often things like this happen because something is being done the cheap or easy way. There was a way to setup data transfer so that it would be secure, but I guarantee that someone either didn't want to pay for it to be setup or IT didn't want to go through the trouble of setting it up.

    4. Re:Can someone explain by Alpha830RulZ · · Score: 1

      so I may be off the mark here, but can someone explain a situation where a computer would need to have its firewall dropped totally merely to transfer data from one system to another?

      Easy. The firewall probably prohibited FTP traffic and they wanted to use FTP or similar to move the files, which is generally regarded as a Good Thing. A better approach would have been to put in a rule temporarily that would have allowed the connection, just between the computers in question. Probably the workers in question didn't know how to config the firewalls to do this, so they unplugged it, and forgot to put it back. However, even taking the firewall down for a few minutes is an egregious breach - the mean time to a port scan these days for an exposed machine is on the order of minutes, and the machines would almost certainly have been scanned and compromises attempted during this time.

      --
      I was taught to respect my elders. The trouble is, it's getting harder and harder to find some.
    5. Re:Can someone explain by Anonymous Coward · · Score: 0

      Both servers were Verus owned and managed, both were outward facing and on different segments, hence the firewall. And yes, it was a lazy, unncessary, hideously stupid thing for them to have done.

    6. Re:Can someone explain by canuck57 · · Score: 1

      I confess, I am not someone who works professionally in the IT field, so I may be off the mark here, but can someone explain a situation where a computer would need to have its firewall dropped totally merely to transfer data from one system to another? I guess it just sounds a little unusual to me. Is this a systemic flaw in the way these systems were being administered or is this someone leaving out an obviously crucial step in an otherwise routine operation?

      The flaw isn't in the systems. Some manager likely applied enough pressure to an inexperienced but cheap I/T person.

      Technically, you don't need to drop the firewall. So what remains is politics. "CIO: We must get this going at all costs, TECH: But... CIO: No butts, just get it done ASAP or..." 7/10 CIOs are like this. They don't trust the good techs, they leave and they hire cheap subservient new cheaper techs. And mistakes are routinely made.

      Don't let I/T build bridges, ships or planes, too many would die.

    7. Re:Can someone explain by Anonymous Coward · · Score: 0

      There is absolutely no good reason to take down a firewall behind which there are otherwise un-protected live servers. It's one of the basic rules of networking. You don't even connect your home PC to the net without a firewall up for god's sake!!

      1.) FTP is a very insecure protocol, no data of any significance should ever be transfered via FTP

      2.) These servers should have been on the same intranet, which would make the secure transfer of the data rather trivial. VPN counts as being on the same intranet, because it is, it just really sucks for data transfer. ;)

      3.) If there is a firewall setting preventing the transfer, it's probably there for a reason. Try to do the transfer a better way, or if it MUST be done that particular way, do a temporary change in the firewall to allow just that connection.

      These types of things are practically common sense, I can't fathom how someone in that situation could make that mistake.

      You ask anybody who manages a firewall for any company to take down thier firewall for a few minutes for any reason, and if they don't give you an immediate "like hell I'm taking down the firewall" they should be fired on the spot.

      That company deserves to die, that's pretty much the dumbest and dangerous mistake I've ever heard of.

  13. Personal liability is not a solution by TheSciBoy · · Score: 1, Interesting

    Who would take a job where you could be held personally liable for any mistake your subordinates may do? You have a company where the size is small enough that you can check everything, I guess, or you wouldn't be taking that responsibility, but would you really want to be personally liable if you had 1500 employees? Would you be able to check all their work for flaws?

    In my opinion, this company has already been punished for their mistake. They exist no more. The employees who made the mistake have already lost their jobs. What would be the purpose of suing? Revenge?

    Personal accountability is great but in a company, that accountability is handled internally. If an external party has been harmed by the mistake, they sue the corporation and the corporation pays. Internally, the company may fire anyone and everyone they find responsible but they cannot and should not be able to take the money they lost from those people. The whole point of starting a corporation, for goodness sakes, is to create an entity that is separate from the employees and even the owners so that the employees and owners are NOT personally responsible.

    Sorry if I'm not crying when there is no one left to sue.

    --
    Badgers, we don't need no stinking badgers! - UHF
    1. Re:Personal liability is not a solution by Jah-Wren+Ryel · · Score: 2, Insightful

      In my opinion, this company has already been punished for their mistake. They exist no more. The employees who made the mistake have already lost their jobs. What would be the purpose of suing? Revenge? I tend to agree with you, especially since the problem didn't kill anyone. But, some questions remain - we don't know how much influence that primary investor had over operations. What are the chances that he will just open up shop again under a different corporate charter and continue the same sort of poor practices that got his first company in trouble?

      I think corporate death like this is a good thing if it results in the rest of the industry internalizing the consequences of poor practices. But if the problems remain, than the mere dissolution of the corporation is not sufficient.
      --
      When information is power, privacy is freedom.
    2. Re:Personal liability is not a solution by Anonymous Coward · · Score: 0

      this company has already been punished for their mistake. They exist no more.

      Bullshit, their "investor" will take the money they sucked out of the corp and reform the board, name the company "Shell Corp Mk. II", buy the assets back from themselves at the bankruptcy firesale and continue on their merry way.

      Personal accountability is great but in a company

      Yep, there it is, everyone should be personally responsibile, except for my precious, precious corporations. If the purpose of punishment is to dissuade people from fucking up, you're going to have to do better than "internally" handling it by firing a scapegoat in order to stop the sociopaths from fucking up bigtime then moving on to fuck up the next one even better.

    3. Re:Personal liability is not a solution by R2.0 · · Score: 1

      "In my opinion, this company has already been punished for their mistake. They exist no more. The employees who made the mistake have already lost their jobs. What would be the purpose of suing? Revenge?"

      No, restitution. The civil court system is primarily concerned with damages and making an injured party whole. "Punitive" damages are tacked on at the end if the conduct has been egregious. So the hospital sues not to punish the company but to recover damages - fines, labor for fixing the contractor's mistake, etc. Since the primary investor bailed, it is presumed that he either extracted his investment, or at least has some signifigant holdings independent of the bankrupt company.

      We can debate the merits of piercing the corporate veil for civil liability, but talking about "punishment" in this context is a red herring.

      --
      "As God is my witness, I thought turkeys could fly." A. Carlson
    4. Re:Personal liability is not a solution by jridley · · Score: 1

      In my opinion, this company has already been punished for their mistake. They exist no more. The employees who made the mistake have already lost their jobs. What would be the purpose of suing? Revenge?

      It's not at all clear that they've been punished. And there has been no restitution to the injured parties.

      Hypothetically; a company makes a program that makes it super easy to do stock transactions, and makes a billion dollars selling it. Then one day it's discovered that there's a vulnerability that allows a black hat to get your account data, and billions of of dollars worth of stocks and cash are drained from tens of thousands of personal accounts.

      The company folds the next day and the owners and employees walk to their next job with money in the bank.

      Have they "been punished" for their mistake? Would you think so if you'd had your entire retirement fund stolen by their software at age 64?

    5. Re:Personal liability is not a solution by TheMeuge · · Score: 1

      In my opinion, this company has already been punished for their mistake. They exist no more. The employees who made the mistake have already lost their jobs. What would be the purpose of suing? Revenge?

      Well, the problem is that when corporations fold, what happens is that the Board Of Directors winds up leaving with multi-million dollar severance packages, while everyone else is thrown into the street. Some of the severance packages are so great as to make it almost more profitable for some individuals to be let go, then to continue working.

      That's the biggest problem with corporations in my view - the people who set the policies are the people with the LEAST to lose in the case of the corporation going bankrupt.
    6. Re:Personal liability is not a solution by mgblst · · Score: 1

      In my opinion, this company has already been punished for their mistake. They exist no more. The employees who made the mistake have already lost their jobs. What would be the purpose of suing? Revenge?


      Star wars fan heh? I suppose when Darth Vader killed the Emperor, all his sins were forgiven as well? All the people he killed, planets and ship destroyed, all forgotten?

      You bastard!!

      But really, how is this much punishment? They will just start up another company, slightly different name, and keep doing the same thing? Nobody is actually anything more than slightly inconvenienced by this.
    7. Re:Personal liability is not a solution by RESPAWN · · Score: 1

      It's been over a year since I last read the HIPAA regulations, but its possible that whomever was responsible for the coding problem could face fines and/or jail time. Personally, I think it's unlikely that it would happen since there was no malice involved, but I'm not quite sure how the laws are written, so if somebody decides to seriously press the matter, we may yet see some people getting in trouble.

      --

      If Murphy's Law can go wrong, it will.

    8. Re:Personal liability is not a solution by Opportunist · · Score: 1

      No, but how about holding them personally responsible for management decisions gone wrong? How about holding them responsible for it when due to their neglect jobs get lost, or how about crimes committed in the name of a company (the Sony rootkit comes to mind)?

      And with responsible I don't mean "Give them 2 million bucks severance pay and send them on to the next company."

      --
      We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
    9. Re:Personal liability is not a solution by jaxle · · Score: 1

      [quote]Who would take a job where you could be held personally liable for any mistake your subordinates may do?[/quote]

      Anybody with a P.E. (Professional Engineer) license, which happens to be most engineers.

  14. hmm by thatskinnyguy · · Score: 2, Insightful

    Enron folded after some financial misdeeds. The investors still had someone to sue. There is always someone to sue.

    --
    The game.
    1. Re:hmm by pev · · Score: 1

      There is always someone to sue.

      A note to our American cousins : This was never the case when you were under British rule. If you ever get fed up of this litigous madness you're always welcome to re-join us and become part of United Kingdom of Great Britain ;-)

      ~Pev
    2. Re:hmm by nomadic · · Score: 1

      A note to our American cousins : This was never the case when you were under British rule. If you ever get fed up of this litigous madness you're always welcome to re-join us and become part of United Kingdom of Great Britain ;-)

      Yes, been wronged? Stiff upper lip, be quiet, suffer in silence. It's the British way.

    3. Re:hmm by thatskinnyguy · · Score: 1

      As someone who is dealing with a frivolous lawsuit right now, don't tempt me.

      --
      The game.
    4. Re:hmm by pev · · Score: 1

      Hey, if you do send me an email - the first beer's on me!

      ~Pev

  15. All right IT monkeys.. by __aagbwg300 · · Score: 3, Interesting
    From the FA:

    While reports of the breaches have been issued in dribs and drabs, all of the data losses can now be attributed to a single incident, in which Verus employees left a firewall down following the transfer of data from one server to another, according to David Levin, vice president of marketing at MedSeek. Can someone explain to me why you would need to open EVERY PORT on a computer to transfer data across two machines? Is there any possible reason why this would be considered? Seriously?
    1. Re:All right IT monkeys.. by archen · · Score: 2, Insightful

      Looking at the clues here: File transfer + Firewall + needed to drop firewall... I'd say it was probably someone who couldn't figure out passive ftp. Needless to say they were transferring the data without encryption in the first place.

    2. Re:All right IT monkeys.. by Kjella · · Score: 1

      Occam's razor: Laziness. Seriously, do you have any idea how many turn off the built-in Windows firewall because it's blocking something and they can't figure it out? The more I learn, the more I realize the world is really full of trained monkeys, and that convienience will lead people to do things that are utterly stupid. I'm not talking about IT monkeys, I'm talking everyone from the janitor to the CEO. Do it quick, do it cheap, do it simple. Do it correct or secure? Only if someone's actually checking or it's someone else doing the work but your ass on the line when shit hits the fan (why most infosec departments are so anal). If they hadn't forgotten to put the firewall back up, you probably never would have heard of it. It's the one and only rule about cheating that's always valid: Do not get caught.

      --
      Live today, because you never know what tomorrow brings
  16. Your reasoning is flawed by BlackCobra43 · · Score: 3, Informative

    The same standard IS applied. When an engineer is sued it is because his design was faulty, not because the building contractor used shitty concrete. If said contractor used shitty concrete, HE will be sued into oblivion.

    Likewise, if the policies enacted by a companydirect actions defraud the public out of millions of dollars, they will be held acountable (see : Enron). If Joe Sixpack in accounting trafficks data all on his own, why should the CEO be held accountable?

    --
    I never spellcheck and I freely admit it. Save your karma for more worthwhile "lol erorrs" replies
    1. Re:Your reasoning is flawed by Smidge204 · · Score: 1

      The same standard IS applied. When an engineer is sued it is because his design was faulty, not because the building contractor used shitty concrete. If said contractor used shitty concrete, HE will be sued into oblivion.


      And so will the engineer, because his responsibility doesn't end once construction starts... part of his job is to monitor the quality of materials, methods and installed equipment and to make necessary adjustments to the design if things can't be worked out in the field.

      An engineer's responsibility for a job isn't over until either some other engineer takes responsibility or he dies.
      =Smidge=
    2. Re:Your reasoning is flawed by jc42 · · Score: 4, Interesting

      Actually, engineers routinely do get out of responsibility for disasters. Part of the reason is that they let their bosses and the prosecutors know about the "paper trail" that they have kept. They threaten to show in court that they knew about the problems, warned their superiors about the problems, and were ordered to ignore the problems. The prosecutors then carefully forget about them.

      The poster child for this, of course, is NASA's history after the Challenger disaster. The immediate desire was to blame the engineers. But the engineers were happy to cooperate with the investigations, because they had copious records showing that they knew about the potential problems, tried to delay the launch, and were overridden by management. Subsequent analyses (by engineers ;-) showed that what went wrong was a known possibility during cold-weather launches, and that a lot of the engineers had indeed tried to delay the launch.

      The real disappointment in this and similar disasters is that the managers who override (or ignore) the engineers are almost never held responsible. NASA did do a bit of management shuffling, true, but nobody takes this seriously. With most corporate disasters, even when the CEO or other officer "resigns", he typically walks off with huge amounts of money and no punishment at all. The exceptions are so rare (think Ken Lay) that corporate managers really don't consider it a serious possibility.

      In the case of software, it's routine for management to order the use of packages that the engineers know to be insecure and/or unsecurable. I've seen it over and over. The developers know that they just have to live with this, and make the best of a bad management decision. The only way to change this is to make the actual decision makers responsible for the consequences. Does anyone seriously think this is likely to ever happen?

      --
      Those who do study history are doomed to stand helplessly by while everyone else repeats it.
    3. Re:Your reasoning is flawed by Smidge204 · · Score: 1

      Actually, engineers routinely do get out of responsibility for disasters. Part of the reason is that they let their bosses and the prosecutors know about the "paper trail" that they have kept.

      Having proof that you did everything "reasonably" possible to meet your responsibilities is not the same as not being responsible at all. (Note: Definition of "reasonably" varies, as it's often a balance between personal ethics and wanting to stay employable)

      The real disappointment in this and similar disasters is that the managers who override (or ignore) the engineers are almost never held responsible.

      I personally think what you are talking about is better defined as "accountability" which is a subtle but important difference. One can act in an responsible manner and still be held accountable if it goes wrong... the important thing is that you can prove you acted responsibly. The managers in your example were definitely responsible for the disaster, but they were not held accountable for it. I agree that this is bullshit of the finest quality.

      Regardless, in your example the software programmers are not responsible for the result in the same way a licensed engineer is. When a bridge collapses, the engineer is often targeted directly because his signature and seal make him directly responsible for the design decisions. When software malfunctions, the company is usually the target, and the shit slides downhill until it ends up in the programmer's lap. A licensed engineer does not have the luxury of using a company as a shield.

      The biggest difference is the programmer has a much easier time finding a new job afterwards, but the engineer is going to have a tough time getting a new license, if it's even possible. If he does get his license back, losing it in the first place will forever be a significant burden on his career.
      =Smidge=
    4. Re:Your reasoning is flawed by Anonymous Coward · · Score: 1, Informative

      With most corporate disasters, even when the CEO or other officer "resigns", he typically walks off with huge amounts of money and no punishment at all. The exceptions are so rare (think Ken Lay) that corporate managers really don't consider it a serious possibility.

      In October 2006, Ken Lay's conviction was vacated. This means his family walks off with a huge amount of money that should have gone to the victims.

    5. Re:Your reasoning is flawed by GospelHead821 · · Score: 1

      The solution is extremely idealistic, but optimally, a programmer who has been ordered to do something that he knows is detrimental to the end-user of the software should refuse to obey the order. He'll probably be fired, possibly without recourse. It is small comfort to anybody that he'd have done the right thing. The fact of the matter is, our society promotes "success" so much that there are plenty of unethical people out there who would be perfectly willing to use irresponsible practices to maintain low costs.

      In an ethics seminar, it's easy to cite the correct course of action, disobey one's boss, and then sue for wrongful termination. In the real world, the weeks or months of unemployment, the stigma of being a problem employee, and the possibility that one will lose one's wrongful termination suit are enough to make a lot of people swallow their objections and just do as they're told.

      --
      Virtue finds and chooses the mean.
      Aristotle, Ethica Nichomachea
    6. Re:Your reasoning is flawed by Anonymous Coward · · Score: 0

      Actually, engineers routinely do get out of responsibility for disasters.


      It depends on who makes the go/no-go decisions. Note that in the US the term "engineer" is bandied about to mean everything from programmers to rocket scientists to people who do structural analysis on bridges.

      In Canada (for example) to call yourself an engineer you actually have to be a member of a provincial organization that gives out licenses. If you design something (car, bridge, building, circuit) that is sold to the general public you have to affix your seal to the design documents. If something goes wrong and the issue is with the design (as opposed to shoddy manufacturuer), it is the people who signed off on the design that hang.

      In the case of the first shuttle explosion, the designers of the O-rings told NASA (their customer) that the rings weren't designed for this weather and that the Shuttle shouldn't go up. Then the people at NASA said 'thanks, but we'll launch anyways'. Why should the engineers be responsible for the use of their design under conditions that they specifically said they weren't able to handle?
    7. Re:Your reasoning is flawed by jc42 · · Score: 1

      Ken Lay's conviction was vacated. This means his family walks off with a huge amount of money that should have gone to the victims.

      Heh. Between writing the message that you replied to, and reading your reply, I wrote essentially the same thing in response to another message in this discussion.

      But for the purpose of this thread, we should note that Key Lay was prosecuted and convicted of some rather serious criminal charges. The fact that he was CEO of Enron didn't protect him. Vacating the charges happened because he die during the appeal process. That's really an independent bit of legal absurdity from the question of whether CEOs ever get prosecuted for their company's crimes.

      And we should duly note that this is an exceedingly rare occurrence. Corporate officers normally don't much about such prosecution into account, because it's so rare. You have to commit not just illegal acts, but acts that lead to a lot of spectacular publicity, in order to be taken to court for what your corporation does.

      --
      Those who do study history are doomed to stand helplessly by while everyone else repeats it.
    8. Re:Your reasoning is flawed by AK+Marc · · Score: 1

      It depends on who makes the go/no-go decisions. Note that in the US the term "engineer" is bandied about to mean everything from programmers to rocket scientists to people who do structural analysis on bridges.
      In Canada (for example) to call yourself an engineer you actually have to be a member of a provincial organization that gives out licenses.


      That's how it is supposed to be in the US. In fact, some engineering society sued Microsoft for using "engineer" in MCSE. In the UK, an "electrical engineer" is what we would call an electrician in the US. The Canadian rules are probably pretty close to the US rules, even if the US rules aren't quite followed as intended.

  17. Nobody ever got fired for chosing ColdFusion by ArsenneLupin · · Score: 1

    I guess this technically still holds true. They didn't get fired, their company only went bust...

  18. Next time... by OpenSourced · · Score: 2, Funny

    The hospitals, which initially reported their breaches separately, were left with no one to sue

    Next time, theyll buy IBM, I guess.

    --
    Rome taught me patience and assiduous application to detail. Virtues which temper the boldness of great, general views.
  19. That is the problem by WindBourne · · Score: 1

    I would bet that even the investor did so only through an INC. It is this lack of responsibility that is occurring in incs and politics which are destroying society. IMHO, it would behoove the country (and perhaps countries) to re-do corporate laws in a fashion that holds boards/CEO, and even investors responsible.

    One interesting side note about this is that corporations are suppose to have nearly all the same rights as humans. But they do not have the same responsibility. That is, they can not be jailed for 20 years or even executed. As I watch their actions, more and more they appear to be sociopathic. They operate with less care about the community and are more about making money for the CEOs (interestingly, not even for the investors rate that high).

    --
    I prefer the "u" in honour as it seems to be missing these days.
    1. Re:That is the problem by Overzeetop · · Score: 1

      Actually, I'd like to see the rights of corporations curtailed. There are actually good reasons for shielding directors, officers, and sharholders (though there are bad reasons, too). I say we make corps less powerful first, then deal with the internals.

      --
      Is it just my observation, or are there way too many stupid people in the world?
    2. Re:That is the problem by jc42 · · Score: 1

      One interesting side note about this is that corporations are suppose to have nearly all the same rights as humans. But they do not have the same responsibility. That is, they can not be jailed for 20 years or even executed.

      Actually, they can be "executed", in the obvious sense that in most countries a judge can order the dissolution of a corporation (or the canceling of its charter or whatever the local legal jargon is). Of course, this has significantly less impact on a corporate "person" as it has on a living person. This has happened a few times in US and UK history. And a few corporations have been "jailed" by being ordered to suspend business for a period of time or until conditions are met. [citations needed ;-]

      And for both human and corporate "persons", death can have important effects on legal proceedings. Consider the recent conviction of Ken Lay (of Enron fame) here in the US. He died of heart problems while the appeal was under way. As a result, the judge "vacated" the lower court's conviction. This means that no further appeals will happen, and more importantly, no sentence will be imposed. This is important, because the courts would very likely have imposed a multi-million dollar fine. With the case vacated, his family now has those millions of ill-gotten dollars, and no worry that the money will ever be taken away from them.

      Chances are that similar laws apply wherever you live. If a corporation can "die" during a prosecution, this will likely terminate the court case and no fine will ever be imposed on the (now non-existent) corporation. Any of the corporation's officers will thus keep whatever money they were able to send to foreign banks before the "death", with very little fear of any future government attempts to take the money.

      In this case, the corporation has already died (at the hands of its officers ;-), so it probably can't be punished further. The question is whether its officers can be made to pay for its actions before it died.

      Metaphors can be fun. Especially when the law decrees that the metaphor is valid.

      --
      Those who do study history are doomed to stand helplessly by while everyone else repeats it.
  20. Specifics? by ArcadeX · · Score: 1

    Would be interested if someone could find out more, TFA didn't have much in the way of details. Was this a server in a DMZ, completely internet facing; hardware or software firewall; was the the file sharing ports left open, or the everything? I've made a few mistakes in my time, but never that big, not to mention the fact that (and i'm saying this without real details) it's pretty sad if you have to mess with a firewall to do file transfers...

    Any self proclaimed basement dwelling lawyers know if criminal charges can be files for HIPPA violations from individuals, or does the corporate liability umbrella going to save someone's ass.

    --
    An I.T. motto in the hands of an idiot is a dangerous thing...
  21. I am not a lawyer, but... by davmoo · · Score: 1

    ...I do know a thing or two about corporate law, having served on a couple of corporate boards.

    Granted this may vary a bit from state to state, but directors and executives of a corporation, and sometimes, depending on the circumstances, the investors, do not get total automatic blanket immunity from prosecution by virtue of incorporating. If the hospitals here can show there was willful negligence, and not simply "someone fucked up", they can go after the directors and executives for every penny they have, and the state(s) involved can go for criminal charges.

    Enron is a perfect example of this. Willful negligence along with criminal activity. Several former execs are now forking out money and wearing prison uniforms.

    This is the same as if someone forms a corporation for their business, and then goes to work with the attitude of "I don't have to watch what I do, I'm a corporation and can't be sued"...boom...they just lost legal protection if there is infact a problem with their work. Under most circumstances, the law does not allow one to be negligent in their work. Ignorant maybe, but not negligent.

    --
    I want a new quote. One that won't spill. One that don't cost too much. Or come in a pill.
  22. I call BS by uncreativeslashnick · · Score: 1

    Just because a corp folds up doesn't mean there is no one left to sue. A corp doesn't just disappear into thin air when someone wants to "pull the plug." The corporation has assets, and those assets have to get distributed to somebody, and that process takes time. A corporation with no assets is in serious danger of losing the liability shield (meaning people can go after the individual shareholders and/or corporate officers). Also, any liability insurance policies in place when the corporation was operating would still be accessible to claimants.

    At the very least, this corp is out of business and won't be making insecure web sites anymore, which is a good thing. With any luck, a smart customer will attach what's left of the assets so that nobody walks away with all the money scott free.

  23. Conservatives strike again! by Anonymous Coward · · Score: 0

    Yet another "deregulation" attack on America! As always, the conservative hatred of America strikes again!

    Go Enron-style accounting!
    Go War-on-Terra!
    Go record shattering deficits!
    Go investor bail-outs!

    Go "Fiscal Conservatives"!

  24. THE country? THE government? by BestNicksRTaken · · Score: 1, Offtopic

    "....managed the websites of as many as 60 of the country's largest hospitals"

    Which coutry might that be then, as I'm sure there's more than one country in the world.

    Slashdot is not USA-specific.

    I'd better shut up now before the World Police come-a-knocking.

    --
    #include <sig.h>
    1. Re:THE country? THE government? by Anonymous Coward · · Score: 0
    2. Re:THE country? THE government? by Dunbal · · Score: 1

      Which coutry might that be then

            The country where everyone sues everyone else. Also the country that has incredibly restrictive legislation on health care information (HIPAA). Am I getting warmer?

      --
      Seven puppies were harmed during the making of this post.
    3. Re:THE country? THE government? by Anonymous Coward · · Score: 0

      Um, yes, slashdot IS USA-specific.

      Dumbass.

    4. Re:THE country? THE government? by RESPAWN · · Score: 1

      Also the country that has incredibly restrictive legislation on health care information (HIPAA). I don't know about you, but I quite appreciate the fact that it's hard for people to obtain my personal healthcare records. And this is coming from somebody who used to perform IT in the healthcare industry and so was responsible for implementing security procedures and maintaining HIPAA compliance of our systems. Yeah, it was a pain but the benefit was worth it. What if, for instance, you found out you were HIV positive. With the stigma that surrounds AIDS would you really want your co-workers and/or boss to find out that you have it? Or what if you were in an accident and hurt your knee. The other guy's insurance company obtains your prior health records and discovers that you had knee surgery back in 1988. Suddenly they declare your hurt knee to be a preexisting condition and you get stuck with the medical bills.

      HIPAA may seem restrictive, but it's better for all of us.
      --

      If Murphy's Law can go wrong, it will.

  25. Knee jerks the wrong way by bhmit1 · · Score: 3, Insightful

    Of course the knee jerk reaction is to make corporations more accountable, raise the risks for the owners, etc. As others have pointed out, no one would want to run a corporation where they are liable not just for doing their job, but being sure that no mistakes were made by anyone else (like the IT worker turning off a firewall, or the janitor that doesn't put down a wet floor sign). Take the current executive pay and bump it up by a factor of 10. Honestly, all the barriers, rules, legal risk, etc are part of the reason big companies have gotten so big.

    Also, lets not forget that if the executives really did something wrong, closing the business isn't enough. There's still a legal record of who owned the business when the breach occurred. What the hospitals are upset about is that the investors stopped putting money into the company which they could try to get their hands on. The investors already lost because the company folded, they never saw a return on their money, and probably lost their principle, too. As did the shareholders (stock=0), employees (no unemployed, a few of them rightfully so), executives (with a black mark on their record for something they didn't do), etc. Anyone who walks away from a folded company as a winner either did nothing wrong, scammed the system, or was really good and didn't get caught. None of which appears to have happened here.

    If you want to be anti-big business, you need to cut down the barriers so that "locally owned" has a fighting chance against the "benefits of scalability".

    1. Re:Knee jerks the wrong way by Stiletto · · Score: 1

      As others have pointed out, no one would want to run a corporation where they are liable not just for doing their job, but being sure that no mistakes were made by anyone else (like the IT worker turning off a firewall, or the janitor that doesn't put down a wet floor sign).

      More liability and accountability is a good thing, as it ultimately benefits shareholders and customers. It's happening for accounting. Why not for other aspects of the business such as the security of personal information?

  26. Let's Ignorantly Blame Capitalism! by smitth1276 · · Score: 0, Troll

    Because it isn't like this sort of thing EVER happens with giant, inefficient, incompetent government bureaucracies (like the VA). The difference is that in this case--with a free market--the people who suck go out of business, while the VA just says "whoops" and continues to suck.
    Okay, you may resume your blind faith-based, anti-capitalist religious babbling now. Chomsky told you to think something, so it must be true!

  27. You put too much faith in journalists by smitth1276 · · Score: 1

    You're assuming that the person who wrote the article understands the distinction between a "firewall", an open port, or any number of other things.

  28. No One to Sue? by Compulawyer · · Score: 1
    There is ALWAYS someone to sue. A corporation is a legal fiction. In most, if not all states in the US, corporations continue to have an existence to sue or be sued for three years after ceasing business operations. In the right cases, courts will readily disregard the existence of a corporation (or LLC, LLP, or other limited liability entity) to reach the individuals (managers / shareholders / sometimes even investors) who ran the company.

    One factor courts look at to determine whether a corporation's existence should be disregarded is whether the corporation was undercapitalized. That is, did the corporation have sufficient assets on hand to properly conduct its business and address liabilities that arise from forseeable business risks (including insuring over those risks). Closing up shop so quickly like this is a big indicator, to me at least, that someone is worried about personal liability.

    --

    Laws affecting technology will always be bad until enough techies become lawyers.

  29. BUT... In Actual Practice... by Anonymous Coward · · Score: 0

    This RARELY happens. Enron is an anomoly. For every Enron (e.g. a corp that gets caught), there are literally several hundreds (if not thousands) of smaller corporations that regularly and routinely fuck over both their customers and investors, and not diddley-squat ever becomes of it. No criminal prosecutions (the cops and prosecutors say "sorry, that's a civil matter, not our job"), and no civil lawsuits either since every blood-sucking lawyer who might otherwise be inclined to take on a plaintiff's case knows there's not a snowball's chance in hell of getting enough useful evidence against them in the discovery phase since the target corp will have shrewdly avoided producing as much possibly evidence that could be used against them in the first place, or will destroy any last remaining shreds of paper-trail evidence they might possess since it's extremely unlikely anything will happen to them for doing so. This is "business as usual" in most of the larger "big business" cities of the USA, like Dallas, Houston, Chicago (where you may get real dead real fast for stirring up any trouble for a "corp"), Los Angeles, etc. (but not necessarily northeastern cities like Boston or NYC where things are run the old school, way not too unlike Chicago)

  30. I've been in this business for too long... by simong · · Score: 1

    When I read that a single contractor was responsible for 60 hospital websites, I thought 'he must have been a busy chap.'

    I think I'll go and lie down.

  31. in a country with the death penalty? by fantomas · · Score: 1

    "Nobody is held accountable for the actions of a corporation. The board of directors and all officers should be held personally liable."

    That's really not going to work too well in a country where you still have the death penalty. Who's going to want to be a director? You are going to have to go round executing a lot of CEOs every time bridges collapse, trains crash, etc. Mind you I suppose that's what happens in China.

    Though I take the point you're making in spirit. We had some train crashes in the UK over the last decade and people are left with their husbands dead, while the top bosses just say sorry and take home another pay cheque. At worst they get sacked and instantly head hunted by other companies for another stupidly high wage. Maybe a few years in prison might not be a bad idea.

    1. Re:in a country with the death penalty? by Overzeetop · · Score: 2, Insightful

      Who's going to want to be a director? At the salaries these places pay, there will be people knocking at the door. And I wouldn't worry too much about the death penalty - captial murder has very narrow limits. I think the CxO would still have to stalk and kill someone to be eligible.
      --
      Is it just my observation, or are there way too many stupid people in the world?
    2. Re:in a country with the death penalty? by Lord+Ender · · Score: 1

      Board members are typically paid high salaries? Are you sure?

      --
      A slashdotter who didn't build his own computer is like a Jedi who didn't build his own lightsaber.
    3. Re:in a country with the death penalty? by Overzeetop · · Score: 1

      Sorry, officers. Not sure about the others, though I doubt their volunteer positions unless the member holds a large quantity of stock. In which case, yes, they're likely to derive significant financial benfits.

      --
      Is it just my observation, or are there way too many stupid people in the world?
    4. Re:in a country with the death penalty? by jedidiah · · Score: 1

      Of course there's a payoff involved somewhere. This is America. The directors are not a charity organization.

      --
      A Pirate and a Puritan look the same on a balance sheet.
  32. Restitution by TheSciBoy · · Score: 1

    We can debate the merits of piercing the corporate veil for civil liability, but talking about "punishment" in this context is a red herring.

    I disagree. Suing individuals for a mistake like this would be revenge and would serve no other purpose than giving some people a misplaced sense of "justice". My question (largely rhetorical in nature) was more regarding the intent of suing someone rather than the purpose of any legal system. The governmental branches mostly have very lofty purposes which just as often are corrupted by the public/politicians/coroporations.

    --
    Badgers, we don't need no stinking badgers! - UHF
    1. Re:Restitution by R2.0 · · Score: 1

      So, are you proposing that mistakes should have no consequences other than those that directly afect the offender?

      If we are in traffic, and I am not paying attention and I crash into you from behind, that is a mistake, in the sense that I did not intend to do you harm. So, since my car is damaged as well, your sense of justice is served, and I am free to go on. Wait a minute - who is going to pay for the damage to your car? I won't - I have been "punished" enough. You are left holding the bag for my mistake.

      People make mistakes all the time. That does not mean they should not be held liable for the consequences of those mistakes, irrespective of anyone's sense of justice or revenge.

      --
      "As God is my witness, I thought turkeys could fly." A. Carlson
    2. Re:Restitution by TheSciBoy · · Score: 1

      Bad example. The insurance company would pay for the damage. Your insurance company in this case.

      What I'm trying to say is that being part of a company where you have a job, the company should (and does, I think, IANAL) shield it's employees from the repercussions if their mistakes. Unlike driving a car, being an employee in a company I have others making decisions that control my actions.

      Let's ask ourselves some questions about this particular case: What if the person who wrote the code that exposed peoples personal data was forced to work continually on overtime under very bad working conditions and with to short deadlines. Is it his fault that his work does not cut the mustard or is it the fault of his object/project-leader who forced him to work under these conditions. Or is it *his* boss fault, for demanding that the project leader finish the project immediately, regardless of code quality? Or the sales-person who promised a delivery date that was impossible to make? Or the testers who tested the site and found no faults with it. Or the boss of these testers who signed off on their findings?

      The inner workings of a company like this is large and can be extremely complex. Finding someone at fault would probably be impossible in any practical sense. People would blame eachother for the reasons for the errors all the way from the bottom to the top and back down again.

      This is some of the reasons why I find that desperately trying to find someone to sue, when a company is at fault, seems more like an act of revenge rather than an act of justice. Even if there is a boss somewhere where the "buck stops" who has made a billion dollars on the company, there is no reason to expect him to be at fault. Maybe the error was snuck in maliciously by an employee to hurt the company because he/she felt slighted. Is this the bosses fault? Maybe the plan of the employee was to hurt the boss, because he knew the company would shut down and that a civil suit would follow, targeting the bosses.

      This is all hypothetical, of course, but I hope you see that there are problems with trying to sue someone for a faulty product from a company. Sue the company and let them handle the investigation into whose fault it all was. If the company is no more, then maybe there needs to be new legislation that limits the time a company can take to shut down to a minimum of 3 months or something for stuff like this to surface.

      --
      Badgers, we don't need no stinking badgers! - UHF
  33. It's just P.R. by Pig+Hogger · · Score: 1
    Standard business practice.

    They will reopen after changing their name to "Virus".

  34. No one to sue... by Glen+Ponda · · Score: 3, Insightful

    The hospitals, which initially reported their breaches separately, were left with no one to sue.

    A US-ian's worst nightmare, no one to sue. Do you really exist if you've no one to sue?

    1. Re:No one to sue... by BCW2 · · Score: 1

      Sadly you are right. The whole sue for everything mentality is out of control here. There is no personal responsibility for anything now days. It's always someone else's fault so sue them. Trial lawyers will be the death of this country!

      --
      Professional Politicians are not the solution, they ARE the problem.
    2. Re:No one to sue... by Anonymous Coward · · Score: 0

      Persequo ergo sum.
      If you sue someone in the middle of the forest and there's noone around to see it, did you still sue?

    3. Re:No one to sue... by Anonymous Coward · · Score: 0

      "A US-ian's"

      What's that? I think you meant "American" and were too stupid and self-important to type it, so you succumbed to the brain-dead groupthink that caused "virii" and "boxen".

      Being wrong doesn't make you clever, it makes you wrong. And in this case, you sound incredibly fucking stupid too.

      Look up "vernacular" then get back to me when you realize it's "American" and nothing you can do will ever make "US-ian" anything less than idiotic.

    4. Re:No one to sue... by Glen+Ponda · · Score: 1

      "A US-ian's"

      What's that? I think you meant "American" and were too stupid and self-important to type it


      I'm not stupid and self important; just self-important. And there are plenty of people who live in a continent called North or South America who would be offended by me implicitly grouping them with people like you (I'm assuming you're a US-ian, but I've no way of finding out as you don't wish to stand over your words. Perhaps you're also one of these.)

      Being wrong doesn't make you clever, it makes you wrong. And in this case, you sound incredibly fucking stupid too.

      And you sound incredibly uptight and angry. You should learn to relax. Don't take things so seriously; you might live a bit longer. It'd be a shame to deprive the World of one second of your delightful, life-enhancing presence.

  35. Dissolution and reconstruction, the perfect escape by TheSciBoy · · Score: 1

    What you describe is of course an undesirable (to say the least) turn of events. However, I find it unlikely that there is no failsafe for this. How do you "fold" a company and what is involved? Can you dissolve a company if you know a lawsuit is coming? At what point are you unable to dissolve a company so that you lose no money?

    Otherwise this seems like the perfect failsafe for any corporation when a large lawsuit is pending. Dissolve the company, reconstruct it in a new name and continue business as usual. I would think that there must be some legal problems with this approach or it would be standard operating procedure.

    --
    Badgers, we don't need no stinking badgers! - UHF
  36. Things did get done before corporations by spun · · Score: 1, Insightful

    There are still partnerships, the only thing we'd need to do away with is the whole limited liability thing.

    --
    - None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
    1. Re:Things did get done before corporations by CodeBuster · · Score: 4, Insightful

      Limited liability is a double edged sword to be sure, but IMHO society is better of with the concept than without it. Consider bankruptcy for example, that is a form of "limited liability" as it applies to the individual. It ensures that your creditors cannot pursue you until to your dying day for your last penny due to circumstances beyond your control. There are abuses sometimes yes, and do not think that this investor is home free, if a lawyer can prove negligence in the breaches AND that the investor knew about the problems and did nothing then the investor can be held accountable for negligence, limited liability or not. The concept of limited liability exists to protect people from personal ruin from forces beyond their control, but it is not carte blanch to commit fraud, breach contract, or engage in negligent behavior.

    2. Re:Things did get done before corporations by rsborg · · Score: 2, Informative

      onsider bankruptcy for example, that is a form of "limited liability" as it applies to the individual.
      You are aware that for a majority of the populace, Bankruptcy as you describe it is pretty much dead? Yes, personal limited liability, RIP 2005.
      --
      Make sure everyone's vote counts: Verified Voting
    3. Re:Things did get done before corporations by spun · · Score: 2, Interesting

      If limited liability only applies to capital, then why do corporations rather than the CEO or board get fined when the corporation commits a crime? People use corporations as a shield against prosecution all the time. It sickens me to see what they get away with, and that's just what we hear about. Corporations don't kill people, the people running corporations kill people, and they get away with it. For instance, why did Warren Anderson go free?

      --
      - None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
    4. Re:Things did get done before corporations by CodeBuster · · Score: 1

      People use corporations as a shield against prosecution all the time. It sickens me to see what they get away with, and that's just what we hear about.

      The point that I was trying to make is that they do not, in fact, always "get away with it", particularly if there has been malfeasance. They can try and use the corporation a shield against tort actions arising out of the demise of their corporation, but depending upon the circumstances the corporation may not provide absolute immunity under law.

      As for the Warren Anderson case it would appear that the courts here in the United States made the correct decision regarding the case. The central issue is this, was Warren Anderson directly and knowingly responsible for what occurred in Bhopal? Was he negligent or did he just happen to be the CEO of a foreign company, with operations in India, at the time that was poorly run by local subordinates? It would set a very bad precedent for the United States to agree to extradition in cases where there is not clear and direct personal responsibility and involvement.

      Suppose that the United States agreed to extradite an American citizen for the crime of speaking ill of the Prophet to say Saudi Arabia. Now, it may be the case that insulting the Prophet is illegal in some countries, but here in the United States it is free as in speech. No, extradition cases must be handled very carefully and the judgment of a foreign court, particularly on the basis of laws or circumstances which would not pass muster here in the United States, against an American citizen is to be viewed with a great deal of suspicion and high burdens of proof to secure extradition or even to establish jurisdiction.

    5. Re:Things did get done before corporations by spun · · Score: 1

      We had, and still have, an extradition treaty with India. Warren was tried and convicted. By our own treaty, he should have been extradited. The treaty is not a pick and choose kind of thing. For countries we do not trust, we do not have a treaty. The prosecution had a very strong case showing that Anderson himself had made many of the decisions leading up to the disaster. Anderson fully expected to be extradited, and went into hiding.

      --
      - None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
  37. I know Tom Lawry by PIPBoy3000 · · Score: 3, Insightful

    Tom Lawry, the CEO of Verus, is someone I've known for over ten years. He used to work for our healthcare organization and was one of the first people to "get it" over the Internet. He pushed for the formation of our web services team and sold the organization on making an Intranet when the whole thing was seen as a big fad.

    Afterwards he went on to form his own company, but still hung around as a consultant. He wasn't particularly technical, but was very good at navigating through the political issues that often come up with organizational change. For example, switching from paper to online job applications was fairly exciting, if only getting our various regions to agree on a single form.

    In later years, we had our disagreements with Tom. I wasn't too happy on how he assisted with our Internet site (his organization was starting to get into the web design business). As a person, he was always kind and thoughtful, despite his various business endeavors. He'd talk about his kid, how expensive going out to a movie in Seattle was getting, or tell stories about the Sisters from his time working at our organization (we're a Catholic healthcare organization).

    We were actually just starting to sign up to use his latest product (a clinic billing system). He was partnering with our medical record system vendor and it seemed reasonably good. Fortunately we didn't have any security breaches related to this incident, but it seems to have been blind luck to some degree.

    I think it's impossible for any CEO, even if they have a technical background, to be aware of every technical issue within their organization. In any complex endeavor, there's just too much going on. At this point, it seems like Tom has suffered quite a bit already. He's lost the business he's spent a decade growing. Prosecutors are looking into criminal charges. I don't know how he'll recover professionally. I'm sure he'll spend the rest of his life second-guessing what he should have done better. Hired different people? Brought in an outside auditor?

    For me, it was a reminder that everything can just disappear in a flash. Cherish what you've got.

    1. Re:I know Tom Lawry by Draknor · · Score: 1

      Mod parent up... Too many posters on slashdot are out for blood, forgetting that there are real people in these corporations, and that they are not all cold-blooded super-villains intent on world destruction.

    2. Re:I know Tom Lawry by whoever57 · · Score: 1

      I think it's impossible for any CEO, even if they have a technical background, to be aware of every technical issue within their organization. In any complex endeavor, there's just too much going on. At this point, it seems like Tom has suffered quite a bit already. He's lost the business he's spent a decade growing.
      It's up to the CEO to ask the right questions, not to necessarily have the right technical background to understand the product. In this case, the right questions would revolve around security (given the laws about medical privacy). Did he arrange security audits of his products? Did he hire people with a background in secure IT products? He may well have done all these things, in which case the loss of his business and the consequences are truly unfortunate.
      --
      The real "Libtards" are the Libertarians!
    3. Re:I know Tom Lawry by Overzeetop · · Score: 1
      Actually, it's the story of someone who is out of their depth - either professionally, technically, or organizationally. Part of being good is understanding your limitations. Tom sounds like a very nice guy, and I know lots of people like that. Many of them are not suited to grow beyond a certain size. Sort of a Peter Principal, except that your business collapses - and other people get hurt - when you hit your limit.

      Part of it is also the lure of money and the likes of the VC vampires. It's easy to get out of your depth. Personal responsibility means just that - taking responsibility for your actions. At the root of this was an inability of management to understand the gravity of what they were dealing with meant higher standards for control and auditing. I'm not normally one to say nice things about ISO9000 stuff, but there are times when a quality control plan is just what is necessary. That kind of decision can only be enforced from the top.

      For me, it was a reminder that everything can just disappear in a flash. Cherish what you've got. That is all to true. You might add - "know your limits" as well. Taking on too big a project is the downfall of many.
      --
      Is it just my observation, or are there way too many stupid people in the world?
    4. Re:I know Tom Lawry by suffe · · Score: 1

      He wasn't particularly technical, but was very good at navigating through the political issues that often come up with organizational change.


      followed by

      I'm sure he'll spend the rest of his life second-guessing what he should have done better. Hired different people? Brought in an outside auditor?


      Not founding, starting and runnign a business you don't understand just because you 'get it'? Seriously, I agree that a CEO can't know of all little details and technicalities. But surely, if you run a shoe store, you should know about shoes. If you run a pet store, you should know how to take care of animals properly. If you run an IT consulting company, you should know enough to be able to tell that "heeeey, wait a second".
      --

      Karma: 2.71828182846 (Mostly due to small, fun pills)
  38. Leadership = Responsibility by Anonymous Coward · · Score: 0

    So I take it that you aren't a big believer in the old sayings "The buck stops here" and "The captain goes down with his ship"? Aren't the leaders by default responsible for their organizations? They shouldn't be held to account for unforseen criminal behavior by employees but if, for instance, lax security due to cost cutting leads to damages then yes, they are personally responsible. If business owners and execs want to be able to claim big personal profits when things goes well then they should also be personally accountable when things go very wrong.

    1. Re:Leadership = Responsibility by jedidiah · · Score: 1

      Yeah, what he said.

      This level of responsibility should be the cost for making 50x the salary of the guys in the trenches.

      --
      A Pirate and a Puritan look the same on a balance sheet.
  39. It can happen to anybody by Jimithing+DMB · · Score: 2, Interesting

    I hate to admit it, but a few years ago I did an update on a Fedora box which renamed protocol 50 from ipv6-crypt to esp or something of the sort. Due to this, the firewall rules failed to load at startup which left the outside portion of the network completely unfirewalled instead of nearly completely firewalled.

    Now ordinarily this wouldn't be a huge problem as one should reasonably hope that even an unfirewalled system is secure. And indeed, the Windows 2000 webserver we had was reasonably secure. It was up to date with all the patches and running great. The ultimate attack vector had nothing to do with lack of patches but rather an ultra-weak password. You see, someone else had an account in the administrators group with a password of 121212. With the firewall being down this account could be used to log in to the SMB shares and thus execute anything with that account's privileges.

    Fortunately, the webserver had absolutely nothing to do with the rest of the network which was behind a second firewall with a totally different authentication/directory system and a different set of usernames and passwords. So the attacker was able to get access to a webserver with nothing of any interest on it. It is at that point when I began to research how the hell he got in and realized that the firewall was not firewalling anything. Later on, we decided the 121212 password on an Administrators group account was the ultimate culprit.

    This just goes to show you that a break-in can happen to anybody. Granted, in this story's case, taking down a firewall on purpose to transfer some data was probably not a good idea and could/should have been avoided. But that's a mistake, not an invitation to burn the perpetrator at the stake.

    Ultimately, a security failure should result in a procedural change. In our case, checking that the firewall rules installed correctly at boot became part of the checklist of things to do when upgrading that server. We also changed the passwords on the webserver and implemented several new policies. Prior to the attack, the webserver passwords were a combination of knowable information like birthdate, hire date, and part of SSN. Their purpose was to secure read-only access to a site with company policy information so it wasn't thought they needed to be highly secure. Unfortunately, all of the users were full Windows users so for all we know it might not have been the weak password on the admin account but instead an disgruntled (ex-)employee coupled with a possible privilege elevation bug. Due to this, we changed all of the user's passwords to be random and moved all of the users out of the Users group and into a group that only allowed logins to the website and not on the console.

    All that for a measily webserver with some simple read-only access to data that doesn't have to be all that secure. Now consider having a web application with critical data like patient reecords and several thousand users all from different hopsitals. That's basically an accident waiting to happen. If I were a company doing that, I'd be sure to have a huge insurance policy to cover the liabilities and/or make damn sure the contracts with customers indemnified the company against lawsuits for accidental breaches.

  40. Re:HIPAA by Anonymous Coward · · Score: 0

    True. I work in healthcare IT, with a large outsourcing company interestingly enough, and I've been through no fewer than 7 different forms of HIPAA training specifically related to privacy of data. At my organization, the effects of HIPAA rear their ugly head every day, from disk encryption on our laptops, to requiring encryption on all patient data that leaves the premisis to not being able to email any PHI.

    I haven't seen a lot of the way of enforcement yet, but that doesn't mean it doesn't exist.

  41. Not a big thing really by xednieht · · Score: 2, Insightful

    While HIPPA and all the other regs apply to the US, the medical industry and insurance companies outsource tons of data services to cheap off-shore companies that don't adhere to the regs.

    With a couple of dollars and a few phone calls you can get mountains of patient data from overseas.

    --

    Hope is the currency of fools
  42. Single IT error? by skinfitz · · Score: 0, Troll

    Don't tell me - that 'single IT error' was choosing Microsoft as an OS platform..?

  43. I live in the town with skylakes medical center by QuantumRiff · · Score: 2, Informative

    This Hospital had 30,000 patients data exposed. There is no mention of it in an easy, quick to find location on their website . This is 30,000 patients exposed in a town of about 40,000 people... Our local newspaper had a very, very small article on it that looked like it was written by the hospital PR person.. Good god I hate small towns..

    --

    What are we going to do tonight Brain?
    1. Re:I live in the town with skylakes medical center by Anonymous Coward · · Score: 0

      So are your medical records available on Ebay?

  44. Re:BUT... In Actual Practice... by Anonymous Coward · · Score: 0

    This is "business as usual" in most of the larger "big business" cities of the USA, like Dallas, Houston, Chicago (where you may get real dead real fast for stirring up any trouble for a "corp"),

    You're a nut. "The Firm" was a movie. As anyone who reads a newspaper can tell you, stirring up trouble for a "corp" will probably result in a large legal settlement from the "corp". Go read www.overlawyered.com

  45. Outsourcing the work and the responsiblity. by zerofoo · · Score: 2, Interesting

    A government regulator at a former job once told me that "You can outsource the work, but not the responsibility". Those are wise words that the managers of that hospital should heed.

    Companies seem to think that if they hire someone else to do the work, they are not responsible for the quality of that work.

    Take Mattel - they have Chinese companies building their products, but not inspecting their work. Thanks to their lack of vendor controls, kids are choking on parts, and getting lead poisoning.

    Companies need to realize that in-house IT is the only way to ensure that your internal standards are met. Outsourcing has its place, but strict quality control / vendor management policies need to be in place to ensure the work is of good quality.

    -ted

    1. Re:Outsourcing the work and the responsiblity. by zz_fish · · Score: 1

      Doesn't matter in-house or outsource, a formal quality control method has to be in place to ensure no such accidents happen. That employee of Verus can be working for the hospital's in-house IT department too.

  46. Not very much, and I don't want to go back there. by Kadin2048 · · Score: 1

    That's idiotic. The "limited liability thing" is what lets corporations raise capital. It's why they work. If there is a key concept that can be said to have driven the economic development -- not to mention wealth generation -- of the last 150 years, that's probably it.

    You're talking quite literally about dismantling the cornerstone of modern civilization. Talk about a cure that's worse than the disease.

    Without limited liability you couldn't have stock ownership and equities trading. You wouldn't have investment. The activities currently undertaken by corporations would only be done by the most wealthy of private individuals. You would create, overnight, an aristocracy of people rich enough to control large-scale enterprises without investment, and everyone else who would be unable to do anything with their money except stuff it in a mattress. The economy -- which is the beating heart of our society -- would collapse.

    --
    "Ladies and gentlemen, my killbot features Lotus Notes and a machine gun. It is the finest available."
  47. Bring out the whipping boy. by Kadin2048 · · Score: 1

    Get rid of the notion of limited liability for corporate officers. Simply alter corporate law so that corporate officers can be held directly accountable, so that when Mega-Chemical Corporation spills toxins into public drinking water, not only is the corporation taken to the cleaners, but the officers of the company are also taken to the cleaners. Thus, even if Mega-Chemical Corporation folds, we can still get our pound of flesh out of the officers. Right. So then, the people who actually have the money -- the actual investors -- all find a few chumps from the street to put in the Board of Directors chairs, and pull the strings from behind the scenes.

    There are lots of people who'd step on each other to get a job like that. Think of it as 'economic bodyguarding.' They get a fat paycheck for sitting there and doing what their master says, unless things go bad and then they take the bullet. I could think of ways to set it up so that they'd never even really know who they were representing.

    You'd get someone to carve your pound of flesh from, but it probably wouldn't ever be the person you really want.
    --
    "Ladies and gentlemen, my killbot features Lotus Notes and a machine gun. It is the finest available."
    1. Re:Bring out the whipping boy. by TheLink · · Score: 1

      I believe that already happens. After the fake bosses go to jail, extra money is sent to their families while they do the time.

      Only can stop this if you can catch them and keep catching them regularly- that makes it too expensive to maintain.

      --
  48. Many apps behave badly, like FTP by wsanders · · Score: 1

    There are many apps that behave this way, FTP is one - using a "control" channel to send a list of ports to the originator of the connection. Of course FTP has pretty much universally adopted PASV to work around this,

    But the list goes on - Veritas Netbackup, Remedy, all of them bloated shiteware of course but nonetheless widely used.

    --
    Give a man a fish and you have fed him for today. Teach a man to fish, and he'll say "WHERE'S MY FISH, YOU IDIOT?"
  49. Re:Not very much, and I don't want to go back ther by ShieldW0lf · · Score: 0, Troll

    You're talking quite literally about dismantling the cornerstone of modern civilization.

    That's what I'm actively conspiring towards, I don't know about the rest of you.

    --
    -1 Uncomfortable Truth
  50. A whole lot of stock just turned into TP. by Kadin2048 · · Score: 1

    Yes, but nothing's stopping these people from forming a new company and doing the same thing again. Except that they just lost everything they had in the old company when it collapsed.

    Don't forget who the Board of Directors of most companies are -- they're the major investors. They have a lot of wealth tied up in that company's stock (sometimes also its debt). If the company goes bankrupt, they're the last ones to get anything. Generally, their shares just turned into toilet paper.

    However much they had invested in the corporation, that's how much they're now out. That's a major disincentive against just firing it up and doing it again.
    --
    "Ladies and gentlemen, my killbot features Lotus Notes and a machine gun. It is the finest available."
  51. Re:Not very much, and I don't want to go back ther by Anonymous Coward · · Score: 0

    That's what I'm actively conspiring towards, I don't know about the rest of you.

    So I guess you're OK with that AMD or Intel-based PC you're typing on. It'll be your last.

  52. Re:Not very much, and I don't want to go back ther by ShieldW0lf · · Score: 1

    Yeah. Because people who don't participate in corporatist capitalism have never achieved anything. Like, say, going to space.

    --
    -1 Uncomfortable Truth
  53. Only one alternative, eh? by FatSean · · Score: 1

    I think there are a few other concepts out there...

    --
    Blar.
  54. They vote with their pocketbooks, just like we do by HalfOfOne · · Score: 1

    I was in IT for two main hospitals in the area. Family and friends have worked at pretty much all of the others, covering most of the region in terms of the top tier of medical care. I can tell you with absolute certainty that IT infrastructure was one of the last considerations on their budgets. It was so bad at my first job that we had to scavenge parts from old servers to build new ones, or take in PCs from home to run as servers. These weren't for back-end reporting, these were for critical patient care information. Allergy databases and medical library info the doctors relied on to make decisions, that type of stuff. The second hospital I worked at was also frighteningly unconcerned with their IT infrastructure. 3500+ users on a single unpatched Exchange 5.5 server, DS and IS on the same local disk volume. It made no difference that they were way out of spec with Microsoft's recommendations, it just had to run and be as cheap as possible. These were hospitals with the absolute brand newest patient care facilities, and billed themselves as the top hospitals in the world. In talking with my old coworkers, none of this has changed. IMHO, the hospitals made their own bed. If they bought medical equipment on the same abysmal budget level that they purchased their IT contracting, they'd be sued into oblivion for bad judgement. This is no different. It will take this and more breaches like this to make them realize that.

  55. Re:Not very much, and I don't want to go back ther by Anonymous Coward · · Score: 1

    Yeah. Because people who don't participate in corporatist capitalism have never achieved anything. Like, say, going to space.

    ROFL. Take a look at the percentage of GDP that was consumed by the Soviet space program, versus ours. Were you planning on accomplishing anything on Earth at the same time, by any chance?

    Oh, and take a look at the computers you get from a society where self-interest is punishable by exile. Instead of bragging about how many texture units your graphics card has, you'd be complaining about the number of vacuum tubes.

    Don't worry, though. Once you're out of your parents' basement, things will look a little more realistic.

  56. They were held accountable... by Crazy+Taco · · Score: 1

    Nobody is held accountable for the actions of a corporation. The board of directors and all officers should be held personally liable.

    The whole company collapsed on them. Do you think that isn't some kind of punishment? This was a private company, so you can guarantee that the board of directors all had a big hand in getting the company started and were all heavilly invested in it (unlike public corps, which tend to just appoint CEOs of other corps to their boards). It collapsed, and they would have lost all chance of recovering that investment. When it folded, they probably had to liquidate everything in an attempt to pay off as many of the initial startup loans as they could, but odds are there was still a lot of debt to be paid off. You make it sound like these guys are Enron execs making off like bandits, when in reality there is a pretty good chance they lost money when it collapsed. And they also lost their primary investment vehicle for making more money... and all because some stupid IT guy at the bottom somewhere was careless. I'm glad they are protected by the legal entity of a corporation, because they probably poured their hearts and souls into starting that company and making it succeed, only to have it collapse through no fault of their own because of some idiot worker. That's pretty heavy punishment for people who knowlingly did nothing wrong and were trying to do things right.

    I happen to own a corporation, however as a professional engineer, I am also personally liable for everything which goes out the door.

    Let's be clear here... you are not liable because you are a professional engineer who owns a corporation. You are liable because you are the professional engineer that DESIGNS the product or service being sold. If you just ran the corporation and didn't do design work and sign off on designs, you wouldn't be liable. These guys ran the corporation, but they weren't the ones designing products and turning firewalls on and off. They hired someone to do that, someone who was careless and didn't do his job right. If you didn't own the corporation but were a professional engineer employed by it who designed a faulty product, you would STILL be liable, because you did the shoddy work. In short, the fact that you are held personally liable for everything coming out the door has nothing to do with your company ownership, and shouldn't. It has everything to do with the fact that you are the one making designs that are supposed to be safe, and for that reason you are held liable. You should be calling for the head of the IT guy who dangerously left a firewall down, because like you, he was the one who was in charge of making the product safe, and unlike you, was negligent.

    --
    Beware of bugs in the above code; I have only proved it correct, not tried it.
    1. Re:They were held accountable... by Overzeetop · · Score: 1

      I am the person responsible for everything that goes in and out of my office, whether I did the actual calcualtions or another engineer has done the calculations. If there were useful regulations, the person who has resonsible charge would be on the hot seat. Manufacturing (and that includes software) companies convinced the government that, as corporations, they were responsible for their in-house designs and should not be subject to professional licensure laws.

      So, yes, as the director of a corporation, you should be liable for everything that your employees do. Not that you can prevent an individual act, but as the "boss" you should put in place the quality control to ensure that serious errors do not make it into projects in the field. Maybe then they would think a little longer, and be a little more diligent if they had to ask themselves, "will I personally ruined if something goes wrong with my widget?"

      A former chairman of safety at Johnson Space Center put it pretty succinctly - there must be one ass to kick when something goes wrong. It's easy to avoid blame where there are lots of people "responsible," but when there is one person on whos shoulders the burden of responsibility sets, they become far more vigilent. In the corporate responsibility shell game, that concept has been lost.

      --
      Is it just my observation, or are there way too many stupid people in the world?
    2. Re:They were held accountable... by Anonymous Coward · · Score: 0

      "Maybe then they would think a little longer, and be a little more diligent if they had to ask themselves, "will I be personally ruined if someone decides to file a frivolous lawsuit, even though I and no one on my staff did nothing wrong?"

      My example is both more realistic and less ridiculous than yours, and illustrates why you're a moron.

      People wouldn't start businesses if one idiot could ruin them by fucking up. NO individual can police all of their operation, and pretending otherwise is stupid, so knock it off.

      I love you people who ignore reality for the pleasant drug of "shoulda". You should be kicked in the nuts for being an imbecile and suggesting something so retarded, but what does that have to do with how the world really works?

      Shut up now. The silly ranting about holding CEOs personally responsible for companies with payrolls numbering in the tens and hundreds of thousands is just idiotic, and you do yourself no favors by spewing it repeatedly like you have.

      One last thing, this line;

      "I am the person responsible for everything that goes in and out of my office, whether I did the actual calcualtions or another engineer has done the calculations."

      is a lie and you know it.

  57. Yes, but... by Bozdune · · Score: 1

    More generally, litigation just isn't the answer. The law is a blunt instrument that, in the end, usually benefits only lawyers.

    o This is why we have ridiculous labels on stuff ("don't stick your fingers in the toaster", "don't give this plastic bag to your toddler", "Danger Will Robinson, danger, danger!") that do absolutely nothing to prevent tragedies and simply drive costs up for everyone.
    o This is why health care is so expensive. I wouldn't be a surgeon no matter how much you paid me. The only people getting rich are the lawyers.
    o And so on.

    I'm not sure I have the answer, in fact I'm sure I don't. But running around suing everyone is just not the answer. If corporate liability was lifted, nobody would start a business. What's the point? You'll just be sued.

  58. Re:Not very much, and I don't want to go back ther by ShieldW0lf · · Score: 2, Interesting

    How much was consumed in cold war spending?

    It's not on me to get into a debate about the efficiencies of historical systems with different problems in different environments, the point is that these technological marvels are not the sole province of modern capitalism and the corporate structure, as you insinuated.

    Do you believe that we've achieved Utopia, a state beyond our capacity to surpass?

    Do you think there will not be a better system that isn't a stepwise refinement, but a replacement?

    This whole system is optimized towards dealing with scarcity, it uses scarcity to provide the motive force to keep people industrious, and it destroys wealth with artificial scarcity to keep that going.

    We've developed the tools necessary to destroy scarcity in a wide range of sectors, but our economic systems equate "plenty for all" with "utterly worthless". That needs to stop if we're going to progress.

    That means new political-economic systems with supporting infrastructure, and it's not going to build itself, and no one motivated by the love of money is going to invest because it's going to devalue everything that they have built their power upon, but it's still going to have to be done.

    And when it's done, and done right, things will be markedly better than they are now, and more efficient, not less. Any group who competes the old way will lose.

    And I'll miss the wintel legacy not at all, I don't imagine.

    --
    -1 Uncomfortable Truth
  59. Personal Bankruptcy [was Re:Things did get ...] by Anonymous Coward · · Score: 0

    Of course, corporatist forces are working to abolish
    personal bankruptcy. It's started with making it so
    credit card companies must get paid, even after
    personal bankruptcy. I think that inherited debts
    and debtor's prison must be next on their agenda.

  60. Were they now? How many? by HiThere · · Score: 1

    My impression, which I'll admit in advance is ill-informed, was that only a very few went to jail, and that it wasn't at all certain that the fall-guys were the one's most culpable.

    Where should I look to find out otherwise?

    --

    I think we've pushed this "anyone can grow up to be president" thing too far.
  61. And here's what "knowingly" means by SIIHP · · Score: 1

    "The DOJ interpreted the "knowingly" element of the HIPAA statute for criminal liability as requiring only knowledge of the actions that constitute an offense. Specific knowledge of an action being in violation of the HIPAA statute is not required."

    That means that you are in violation if you were aware that someone else did something, but not that it was a violation.

    By the way, violations were interpreted by our compliance officer in some very strange ways, one of which had the effect of disallowing the IT department to work on computers that held client data.

    --
    I only go to buffets for the unlimited soft serve.
  62. IANAL by Anonymous Coward · · Score: 0

    I am not even an economist so I leave the squabbles about corporate blame to you experts.

    I just want to know this: how long was the "private" data visible on the web? Was any of it in a crawlable form? did any of it get indexed and now lurks in cached search engine repositories?

  63. Re:Not very much, and I don't want to go back ther by Hatta · · Score: 1



    You're talking quite literally about dismantling the cornerstone of modern civilization.


    That's right folks, you heard it here first! The abdication of personal responsibility is the cornerstone of modern civilization. No wonder the world is so fucked up.

    --
    Give me Classic Slashdot or give me death!
  64. Re:Not very much, and I don't want to go back ther by Anonymous Coward · · Score: 0

    How much was consumed in cold war spending?

    Doesn't matter. All that matters is, how much is left? In our case, quite a bit. In the Soviets' case, not so much.

    It's not on me to get into a debate about the efficiencies of historical systems with different problems in different environments, the point is that these technological marvels are not the sole province of modern capitalism and the corporate structure, as you insinuated.

    Um, yeah, they pretty much are.

    Do you believe that we've achieved Utopia, a state beyond our capacity to surpass?

    Nope, but I believe that we as humans have done a heck of a lot worse, just trying to achieve Utopia.

    This whole system is optimized towards dealing with scarcity, it uses scarcity to provide the motive force to keep people industrious, and it destroys wealth with artificial scarcity to keep that going. We've developed the tools necessary to destroy scarcity in a wide range of sectors, but our economic systems equate "plenty for all" with "utterly worthless". That needs to stop if we're going to progress.

    I have no argument with any of that.

    That means new political-economic systems with supporting infrastructure, and it's not going to build itself, and no one motivated by the love of money is going to invest because it's going to devalue everything that they have built their power upon, but it's still going to have to be done.

    That, I'm not so sure of. The people who built your computer, who built your house, who deliver your newspaper, who grow your food, and who sign your paycheck aren't trying to "build a political-economic system." In fact, if you look at history, you'll see that nothing worthwhile was ever accomplished by someone trying to "build a political-economic system."

    And when it's done, and done right, things will be markedly better than they are now, and more efficient, not less. Any group who competes the old way will lose.

    Possibly, especially if you succeed in carrying out the threat in your .sig line. (I doubt you'd be very happy if I stuck a gun in your back and demanded your information. Let's start with your credit card number and SSN, shall we?)

    And I'll miss the wintel legacy not at all, I don't imagine.

    You'll sure as heck miss the process that gave it to you.

  65. Re:Not very much, and I don't want to go back ther by Fulcrum+of+Evil · · Score: 1

    No, actually, they haven't. How do you think we got the capital to go to space, and who designed the systems used to get there?

    --
    "We returned the General to El Salvador, or maybe Guatemala, it's difficult to tell from 10,000 feet"
  66. Why sue? by SurturZ · · Score: 1

    The company has gone out of business. Why is there a need to sue anyone? From my reading of the article, no-one was actually harmed as a result of the security breaches. On what basis would "damages" be awarded?

  67. Re:Were they now? How many? by Anonymous Coward · · Score: 0

    The White House where the rest of them got cushy "consultant" positions.

  68. Re:Not very much, and I don't want to go back ther by spun · · Score: 1

    How succinctly put. *sigh* It seems so obvious, why don't more people see it that way?

    Yes, that's a rhetorical question.

    --
    - None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton