Banking / Finance News
Source: Bankinfosecurity
Complete item: http://www.bankinfosecurity.com/articles.php?art_id=1475
Description:
A federal judicial panel will hear arguments next week on whether to consolidate the class action lawsuits brought against Heartland Payment Systems (HPY) by financial institutions. The Judicial Panel on Multidistrict Litigation in Louisville, KY will hear the arguments next Wednesday, according to Benjamin Johns, one of the lawyers representing the class action suit from the law firm of Chimicles Tikellis, Haverford, PA.
"These cases tend to be long and drawn out - there have been multiple class action suits filed in New Jersey and in Texas," says Johns. Two class action suits have been filed by Chimicles Tikellis, (New Jersey Filing PDF) (First Bankers Trust PDF), and a third class action suit was also filed in Texas against Heartland by Lone Star National Bank, Pharr, TX. (Lone Star Filing PDF)
As first reported on Jan. 20, Heartland, the sixth-largest payments processor in the U.S., revealed that its processing systems were breached in 2008, exposing an undetermined number of consumers to potential fraud.
Since then, a growing number of banking institutions have stepped forward to announce that their customers were among those affected by the breach.
Johns says that generally multiple class action suits are consolidated and heard in one court. "Nothing of substance has happened before this," he says. "The court, once it hears the argument, will take anywhere from a month or two to release its ruling on where the suit will be heard."
Motions have been made to hear the case in Florida, Texas and New Jersey US district courts, says Johns.
There are three types of class action suits being brought against Heartland: the financial institutions' class action suits; consumer cases; and also some securities fraud class action suits have been filed by Heartland's investors. Johns says there are a total of 30 suits filed against Heartland in various federal courts.
There are five banks and credit unions named as plaintiffs in the New Jersey filing: Amalgamated Bank, New York, NY; Matadors Community Credit Union, Chatsworth, CA; GECU, El Paso, TX; MidFlorida Federal Credit Union, Lakeland, FL; and Farmers State Bank, Marcus, IA. All the institutions say they have had to re-issue "substantial" numbers of credit and debit cards because of the Heartland breach. Johns says thus far no other financial institutions have been named to the suit, but that doesn't mean others won't be joining.
"We've talked to a lot of banks and credit unions and gathering their information," Johns says. "Once the cases are consolidated we'll be making a determination of who will be added to consolidated complaint."
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