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Target Under Fire For Ignoring Cybersecurity Risk

MINNEAPOLIS (WCCO) -- Target is under fire once again after a front-page article in Bloomberg BusinessWeek says the company ignored an early warning from its own cybersecurity firm that it had been attacked.

The news magazine is reporting that Target received the warning on Nov. 30. Previously, Target CEO Greg Steinhafel said he learned of the breach on Dec. 15.

The public was notified Dec. 19.

Target is not denying the Bloomberg Businessweek report. The company issued a statement Thursday saying there was an earlier warning that made its way to corporate headquarters, but that it was a report of only a small amount of activity.

The story is prompting a new round of bad publicity for the retail giant, which saw its last quarterly sales earnings drop 40 percent.

What everyone knows now is that this was no small breach. Forty million credit cards and personal information from an additional 70 million customers was stolen.

The Bloomberg story - with the cover "Easy Target" and the headline "How Target Blew It" - says Target did nothing with the initial warning on Nov. 30.

In a statement, Target spokesperson Molly Snyder said information suggesting a small breach was relayed to Target headquarters.

"The team determined that it did not warrant immediate follow up. With the benefit of hindsight, we are investigating whether, if different judgments had been made, the outcome may have been different," Snyder said.

Crisis-management expert John Austin says "The buck stops there."

"It just proves the point that these crises are not one-day events anymore," Austin said. "They can go on and on and on."

But computer consultant Doug Swinhart, who has advised numerous small- and medium-sized companies, says blaming Target is not fair.

"It would be no different if my house got robbed and the police came and arrested me," Swinhart said. "They are the victim."

Swinhart, who hosts a technology show on WCCO Radio, says it's important to remember that similar breeches have occurred at other companies.

"Neiman Marcus was hit, Sears was hit, Walmart was hit - same software," he said.

Last week ago, Target's Chief Technology Officer Beth Jacob abruptly resigned, and Target announced a restructuring of its top executives for IT security.

Target stock closed Thursday at minus 2.24 percent.

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