Cybersecurity Policy Report, PRIVACY—Financial data analytics company to pay $37 million in civil settlement with federal agencies, (Mar 13, 2024)

By Ursula Furi-Perry, J.D., MBA

The company improperly accessed, used, and retained anonymized credit card data collected in the course of fulfilling its government contracts, according to settlement agreement with several federal agencies.

Argus Information & Advisory Services, Inc., a financial data analytics provider headquartered in New York and incorporated in Delaware, has agreed to a $37 million payment in order to settle allegations of data misuse under government contracts, the U.S. Department of Justice (DOJ) announced. The claims against the company were brought by the DOJ, the Office of the Comptroller of the Currency, the Federal Reserve Board, the Consumer Financial Protection Bureau, and the Federal Reserve Bank of Philadelphia. The claims centered on the False Claims Act and the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) and involved the use of credit card data obtained pursuant to contracts with various federal regulators between 2009 and 2020.

Under the contracts in question, Argus collected anonymized credit card data from banks and then provided the government entities with validating, aggregating, storage, retrieval, and reporting services for that data. The contracts had regulated Argus’s ability to use, disclose, or distribute credit card data for purposes other than the performance of the government work.

The settlement agreement alleges Argus violated the terms of the contracts by improperly accessing, using, and retaining the anonymized credit card data. Moreover, Argus allegedly incorporated that data into certain products and services that it sold to commercial clients and failed to disclose its improper access and use of the data to those clients. Argus denied these allegations.

Under the terms of the settlement agreement, Argus will pay to the federal government $37 million, of which $13.5 million is being paid in restitution. The agreement releases Argus from civil liability arising from the government’s claims, and it constitutes neither an admission of liability by Angus nor a concession by the federal government that its claims were not well-founded.

“Companies that do business with the federal government are expected to abide by the terms of their agreements, including any restrictions on the use or disclosure of government supplied data,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will not permit contractors to profit from the misuse of such data and to put the data at risk.”

Companies: Argus Information & Advisory Services, Inc.

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