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Report: Capital One Cyberbreach A Result Of High Turnover

Jayson Derrick

Capital One Financial Corp. (NYSE: COF) lost one-third of its employees in its cybersecurity unit in 2018 which may have culminated in the July 2019 data breach, The Wall Street Journal reported.

What Happened

Capital One's cybersecurity unit suffered high amounts of turnover and may have failed to install necessary software and security checks to defend against a hack, sources told WSJ. Employees raised concerns to executives the cybersecurity business is understaffed and the issue was even discussed at the board level.

The financial institution once held a reputation of being a top place for tech talent to work, especially in the coveted "red team" -- a unit dedicated to finding vulnerabilities in its security system.

Why It's Important

When Capital One named Michael Johnson as chief information security officer in 2017, WSJ said a clash with cybersecurity workers started. Johnson served as the Chief Information Officer for the U.S. Department of Energy and many employees felt his style of leadership style didn't translate well in the private sector.

Many employees flocked Capital One to work at comparable or better jobs elsewhere, according to WSJ. However, a spokeswoman for the bank said its cybersecurity unit was a "net importer of talent."

It's unclear if staffing issues directly resulted in the July databreach which resulted in the theft of personal information of more than 100 million people. The spokeswoman for Capital One told WSJ it will "incorporate the learnings of this incident to further strengthen our cyber defense."

Capitol One shares traded around $84.36 at time of publication, down from the $96 level shares traded at before news of the breach on July 29.

Related Links:

Here Are A Few Things Capital One Customers Should Do Following The Data Breach

The Lesson From The Capital One Data Breach: The Cloud Is Vulnerable, And We Shouldn't Forget It

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