EMC expects RSA breach to cost US$81.3 million

EMC has squirrelled away US$81.3 million in reserve to cover the cost of customer remediation in response to the attack on RSArsquo;s SecurID system it revealed in March.

The company had already revealed at its July second quarter earnings that remediation costs were $66.3 million between April and June 2011.

However, that figure did not include the expense of ldquo;hardeningrdquo; its systems after the breach was reported in March, nor expected future costs.

The $81.3 million reserve it had in place at June 30 2011 should carry it through to the end of the year, by which time remediation efforts would be ldquo;substantially completedrdquo;, EMC reported in its 10-Q filing lodged with the Securities and Exchange Commission last Friday.

ldquo;We considered whether additional losses might result from the pending remediation efforts beyond our existing accrual and concluded that no additional material losses related to the remediation efforts are reasonably possible,rdquo; EMC reported in the filing.

At the companyrsquo;s recent earnings call, EMCrsquo;s chief financial officer, David Goulden, cited attacks on the Australian government as a catalyst for customersrsquo; new sensitivity to risk that prompted the expansion of its token replacement program.

Copyright © 2011 IDG Communications, Inc.

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