2021-06-03 i3 Verticals, Inc. Cybersecurity Incident

Page last updated on April 11, 2024

i3 Verticals, Inc. initially disclosed a cybersecurity incident in an SEC 8-K filing on 2021-06-03 17:26:28 EDT.

Incident Details

Material: Unknown
Is Breach: Unknown
Records Compromised: Unknown
Data Types Impacted: No Data Types Tracked (yet)

Compromised Date:
Detected Date:
Disclosure Date: 2021-06-03
Contained Date:
Recovered Date:

Attack Goal: Unknown

Costs: No Costs Tracked (yet)

Filings

8-K filed on 2021-06-03

i3 Verticals, Inc. filed an 8-K at 2021-06-03 17:26:28 EDT
Accession Number: 0001728688-21-000054

Item 8.01 Other Events.

A Petition was filed on June 2, 2021 in the 19th Judicial District Court, Parish of East Baton Rouge by the State of Louisiana, through the Division of Administration, and the East Baton Rouge Parish Law Enforcement District and other Law Enforcement Districts, on behalf of themselves and as class representatives of a purported class of law enforcement districts in the State of Louisiana against i3-Software & Services, LLC (“S&S”), a subsidiary of i3 Verticals, Inc. (the “Company”) located in Shreveport, Louisiana, the Company, the leader of the S&S business and its former owner. The Petition seeks monetary damages for the cost of network remediation of $15 million, return of their purchase prices, potential additional expenses related to remediation and any obligation to notify parties of an alleged data breach as and if required by applicable law, and reasonable attorneys’ fees. The claimed damages relate to a third-party remote access software product (“Third-Party Software”) used in connection with services provided by S&S to certain Louisiana Parish law enforcement districts and alleged inadequacies in the Company’s cybersecurity practices.

S&S was acquired by the Company in 2018 for an aggregate purchase price of $17 million, including upfront cash consideration and contingent consideration, and provides software and payments services within the Company’s Public Sector vertical to local government agencies almost exclusively in Louisiana.

The Company is also aware of a related investigation led by the U.S. Department of Justice (“DOJ”). The Company has produced documents in response to subpoenas and made employees available for interviews by the government. The Company has cooperated fully and is continuing to cooperate. Based on information available to the Company, the Company believes that the investigation is focused on unauthorized access to certain S&S customers’ internal networks by unknown third parties. Such unauthorized access may have been enabled in part by the Third-Party Software.

The Company is unable to predict the outcome of the DOJ’s investigation or the related litigation. We do not believe that these matters will, individually or in the aggregate, have a material adverse effect on our business or financial condition. We cannot give assurance, however, that these will not have a material effect on our results of operations for the period in which they are resolved.

Company Information