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Title insurer faces lawsuit, NY state investigation over data security

Title insurer First American Financial Corp. is on the hot seat for having 885 million data files available without authentication to anyone with a web browser.

The files going back to 2003 contained bank account numbers, social security numbers and financial and tax records, according to Bloomberg.

The company saw its stock drop from $55.60 on May 24 to below $50 on May 28, after the security problem was reported. A Pennsylvania man filed a class-action lawsuit against First American, and the NY Department of Financial Service launched an investigation.

First American’s bad publicity began with cybersecurity journalist Brian Krebs, who reported on the exposed records May 24.

However, some analysts backed First American, saying the only person aware of the problem initially was Krebs. The company took down the problematic database as soon as Krebs told them about it, these analysts said, and they expected the company would not see much of an earnings impact.

The New York Times, citing the American Land Title Association, said First American handles one in every four title transactions in the U.S.