ChoicePoint CEO Mum on Security Breach

NEW YORK – ChoicePoint (CPS) CEO Derek Smith refused to answer questions on Thursday about the security breach that allowed criminals to access the company's database, telling shareholders at the company's annual meeting that the matter was the subject of pending litigation.

"As we have previously disclosed, the company is continuing to investigate the recent fraudulent data access and other matters," Smith told about a dozen shareholders at the Waldorf-Astoria Hotel in Manhattan.

The Alpharetta, Ga.-based company announced in February that the pMersonal information of 145,000 Americans may have been compromised when thieves posing as legitimate small business customers gained access to its database. Authorities say at least 750 people were defrauded in the scam. The scandal has fueled consumer advocates' calls for federal oversight of the loosely regulated data-brokering business, and Capitol Hill hearings are likely soon on the issue.

Smith said Thursday the company supports regulatory measures including independent oversight and "increased accountability for those who handle sensitive consumer data, including public records."

The Securities and Exchange Commission (search) and Federal Trade Commission (search) have begun investigations of Choicepoint in the wake of the scandal.

Smith and ChoicePoint (search) President Douglas Curling earned $16.6 million from ChoicePoint stock sales after the company learned last fall of the security breach and before that was made public on Feb. 15.

During Thursday's brief meeting, the shareholders voted in four new directors and approved the appointment of Deloitte & Touche as the company's independent auditor.

After reading prepared remarks, Smith answered written questions submitted by shareholders. A question relating to the security breach was deemed inappropriate and was not read aloud.

Choicepoint collects data on individuals, including Social Security numbers, real estate holdings and current and former addresses. It has about 19 billion records, and its customers include insurance companies, financial institutions and federal, state and local agencies.