Goldman Sachs recently informed investors in its alternative investment funds that their personal information may have been compromised due to a cyberattack at the law firm Fried Frank Harris Shriver & Jacobson LLP. While Goldman Sachs confirmed its own internal systems remain secure, the incident has already led to a proposed class-action lawsuit against the law firm by an affected investor.
The Goldman Sachs Group Inc. has issued a formal warning to individuals invested in its alternative investment vehicles regarding a data breach at one of its external legal counsels. In a correspondence sent in mid-December, the bank explained that Fried Frank Harris Shriver & Jacobson LLP, a firm providing legal services to various private equity and offshore funds, suffered a cybersecurity incident. Goldman Sachs clarified that its own corporate infrastructure was not breached during the event, but it is currently investigating the extent to which client data held by the law firm was accessed or acquired by unauthorized parties.
Legal action followed quickly after the disclosure, with an investor in the Petershill Private Equity Seeding II Offshore Fund filing a lawsuit against Fried Frank. The litigation highlights concerns over how the data was handled and the potential risks to investors whose sensitive information was managed by the firm. Although Goldman Sachs is not named as a defendant in the suit, the bank is actively working with the law firm to determine the full scope of the exposure. The bank has reiterated its commitment to client privacy while distancing its own security protocols from the law firm's lapse.
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In its communication to clients, the bank noted that the law firm believed the exposed data was unlikely to be misused or widely distributed. However, industry observers have pointed out that the letter lacks a specific explanation for this optimism. The distinction between data being merely exposed versus actively acquired remains a point of contention, as the latter implies a more significant level of control by the attackers. This ambiguity has raised questions about whether the breach involved a targeted theft of records or a broader systemic intrusion.
Fried Frank has issued a public statement confirming the security incident and noting that they engaged external cybersecurity experts and law enforcement to contain the situation. The firm stated that the breach affected a range of its clients and that they are currently in the process of notifying those impacted. Despite these confirmations, the firm has declined to answer specific questions regarding the number of clients involved or whether sensitive health information was compromised. The law firm maintained that its operations have continued without disruption throughout the recovery process.
The lack of detail regarding why the firm believes the data will not be misused has led to speculation among cybersecurity analysts that a ransom may have been paid to prevent the release of the information. No known hacking groups have claimed responsibility for the attack or leaked any files online, which is often a sign that a private settlement was reached. As the law firm continues to notify its broad client base, it is possible that more organizations will come forward or that additional legal challenges will be filed in the coming weeks.
Source: Goldman Sachs Warns Some Clients Data Could Be Exposed In Law Firm Breach