Data Breaches Shut Firms Down – Don’t Let Yours Be Next
After 40 years of serving over 300,000 clients, law firm Mossack Fonseca shut its doors for good. The Panamanian firm came under scrutiny after hackers exposed 11.5 million of its documents – the infamous Panama Papers – in a2016 security breach (Read more about the Panama Papers here). While the debacle that followed the hack created a torrent of bad press and a relentless investigation, the mortal blow for Mossack Fonseca was the discovery of the firm's complicity in international tax crimes.
Hackers revealed some of Mossack Fonseca's clients were evading tax obligations by placing money in offshore accounts, which further damaged the firm's reputation. Things unraveled from there; in early 2018, Panamanian government officials investigated Mossack Fonseca after the region's largest engineering company, Oderbrecht, confessed to bribing officials for construction contracts. Though the authorities couldn't prove a connection between the firm and the bribes, they did discover the tax infractions.
In March 2018, Mossack Fonseca released the following statement: “The … deterioration [of our reputation], the media campaign, the financial circus, and the unusual actions by certain Panamanian authorities, have occasioned an irreversible damage that necessitates the obligatory ceasing of public operations at the end of the current month.” It also announced that it would retain a small number of employees to comply with government protocol.
Before the Panama Papers, Mossack Fonseca served over 40 countries and placed #4 in the world for offshore services. Only a couple of years after the initial breach, the founders of the firm were charged with money laundering. Mossack Fonseca serves as a prime example of how data breaches can ruin a firm's operations.
A hack's potential damage warrants enough concern for every firm to roll out sound defense strategies. Even though your firm probably isn't in hot water like Mossack Fonseca was, it’s important to implement a thorough set of security measures – including common-sense processes and sophisticated technologies – that defend against cyber threats.
Tools like Abacus Private Cloud can help protect firm and client data in the event of a data breach. AbacusNext provides fully compliant and secure solutions that feature full-spectrum data security protocols.