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Vasco Data says DigiNotar filed for bankruptcy

Tue, 09/20/2011 - 5:05am
The Associated Press

OAKBROOK TERRACE, Ill. (AP) — Internet security company Vasco Data Security International Inc. said Tuesday that its DigiNotar subsidiary has filed for voluntary bankruptcy protection in a Netherlands court as a result of hacking attacks this summer.

The hacking into DigiNotar is believed to have let the Iranian government spy on thousands of Iranian citizens' communications with Google's email service in August. A subsequent Dutch government review found that DigiNotar — whose business is ensuring digital security — had used weak passwords, did not update software on its public servers and had no antivirus protection on its internal servers.

On Tuesday, Vasco stressed that DigiNotar's bankruptcy filing does not involve its core business.

"Although we are saddened by this action and the circumstances that necessitated it, we would like to remind our customers and investors that the incident at DigiNotar has no impact on Vasco's core authentication technology," said T. Kendall Hunt, Vasco's chairman and CEO, in a statement.

DigiNotar was declared bankrupt by a Dutch district court on Tuesday and will be liquidated.

Vasco said it is working on assessing the damages caused by the hacker intrusion and "will provide an estimate of the range of losses as soon as possible."

Cliff Bown, Vasco's chief financial officer, said the losses associated with DigiNotar are likely to be "significant." At the same time, the company expects "a significant portion of the value assigned to the intellectual property acquired from DigiNotar to continue to have value as we incorporate the technology into our existing product line."

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