Home Depot Incorporation (NYSE:HD), on November 25, 2014 announced that it is facing almost 44 lawsuits in the region of Canada and the United States. Further elaborating upon the nature of the suits, the company said that all these cases were of civil nature and were related to the mass data breach that the company was allegedly involved into in the first part of the year.

It is important to mention here that Home Depot is under investigation by a number of State and Federal departments. The company is worried that all these investigations and claims against it can adversely affect its business. The attention of management is also likely to divert from business operations to lawsuits handling. Moreover, these lawsuits can confer lots of additional costs on the company.

Home Depot Incorporation (NYSE:HD), during a meeting with the press, said that the company is still under investigation. It further said that the management is assessing the impacts of all these investigations upon company’s financial figures and reputation. It is not impossible for the company to identify other sources of breach in the coming weeks.

In its efforts to secure the business from future threats and attacks, Home Depot Incorporation (NYSE:HD) has launched a program that fully encrypts the credit card information of its customers. This program will take care of all the sales transactions that will happen in the Home Depot terminals in the region of U.S. The company is also planning to launch this program in its Canadian terminal by first half of next year. The company is also making arrangements to have PIN and EMV technology installed at its shops so that each transaction made by the credit or debit card can be authenticated.

Home Depot Incorporation (NYSE:HD) earlier in November revealed that around 53 million emails of its customers have been stolen through a cyber attack. The account information of another 56 million customers is under risk. The company posted its financial results last week; it has incurred pretax expenses of around $28 million in the most recent of its quarters.

Home Depot Incorporation (NYSE:HD) had taken an insurance policy worth $100 million for expenses related to data breach. This policy was taken before the company experienced a cyber attack at its Target Corporation last year. After the attack, the company started taking care of customers’ information, especially during the holiday season. Management of the company briefed the investors that the insurance policy covers some of the fraud expenses and legal costs but it does not cover all the related expenses.

Coming to the stock prices of Home Depot Incorporation (NYSE:HD), the company, on the last trading day of November 25, 2014, started its stocks at a price of $98.64 and closed at a price of $97.01, after hitting the highest price of $98.87. The company has a total market capitalization of $132.21 billion with a P/E (price to earnings) ratio of 22.06.

As shares prices had seen a decline to 79 cents, falling at .8% on the trading Tuesday, bringing the net total to $97.24. This came at a time when Wall Street was looking for a lower share price $1.13, bringing the net revenue to $20.47 billion. Frank Blake, who was the former Chief Executive of Home Depot (NYSE:HD) was succeeded by Craig Menear at the start of November. An overall increase in sales prices was seen in the stores all over US, in the yearly quarter ending Nov. 2. An increase in sales was seen up to 5.8%. In addition, increase of the profits by 5.2 % was seen in same store sales. Also, increase in consumer purchases rose by 3.2 % and a 2.3 % increase in average ticket was also observed.

Hackers using a third party’s vendor credentials, gained access to company’s network system. Up to 56 million credit and debit cards and customers’ info and email addresses had been accessed due to the breach. But earlier this month, the company informed that another 53 million emails had been compromised due to the breach.

Home Depot (NYSE:HD) assured customers PIN numbers remained safe and any fraudulent charges would be covered. The retailer also offered credit monitoring and identity protections services free of charge. On Tuesday’s conference call, Menear said Home Depot (NYSE:HD) will continue to implement enhanced security measures.

While explaining the security measures taken by the company, Menear explained during the conference call that credit monitoring and identity protection services were being offered to the customers free of charge.

Expenses of $28 million, inclusive of the taxes were recorded by the company which were a result of the data breach problem faced by the company in the third quarter of the year.

In 2014 fiscal year the expenses like reimbursements for fraudulent purchases were not included in the expenses, as the company stated that they hadn’t been able to estimate the costs yet.

Home Depot (NYSE:HD) confirmed that a fiscal growth of 4.8% was forecasted by the company and the shares on earnings were recorded as approx. $4.54.

Through the latest quarter of the year, the retail group has already purchased $5.74 billion shares back. The retailer plans to buy $1.26 billion worth of shares back as well during the fourth quarter. The quarterly earnings of the Lowes chain of groups (LOW) will be reported on Wednesday.

Home Depot’s (NYSE:HD) forecast for 2014 related to sales growth of approximately 4.8 percent and profits of $4.54 per share have been reconfirmed. This also includes almost $34 million cost associated with breach of data between April to September this year.  The home improvement retailer is of the view that it might encounter additional costs linked with breach inclusive of legal actions and as a consequence fourth quarter and future period’s results might not meet the expectation. In U.S. and Canada, Home Depot is up against at least 44 civil lawsuits associated with the breach. Shares of the company showed a slight decline in the pre market trading, dropping by 0.4 percent to $97.66.

On Sept 18, Home Depot (NYSE:HD) disclosed that details of almost 56 million debit and credit cards have been stolen by hackers in the massive cyber attack lasting more than a month. Further adding to the agony, the company accepted earlier this month that close to 53 million email addresses have also been stolen in the attack. Home Depot explained that hackers accessed its network in April using a third-party vendor’s username and password and stole information through malware installed on self-checkout systems in the U.S. and Canada.

This breach has overtaken pre-Christmas data theft of Target Corp (NYSE:TGT) in which 40 million debit and credit cards were hacked thus badly impacting Target’s sales and profits. So the banks, retailers and card companies are rushing to incorporate microchips in U.S. credit and debit cards for enhanced security. Home Depot has also pledged to activate chip enabled check out terminal at all stores in U.S. by end December.

National Association of Home Builders reported that during the period of August to October, the response of homebuilders in U.S. was amazing because the strength in job market lead to increase in demand.  Resultantly, the third quarter results depicted increase in net income of Home Depot (NYSE:HD) to $1.54 billion or $1.15 per share which was $1.35 billion or $0.95 per share last year.  Research firm Consensus Metrix estimated 5 percent increase in sales for the retailer, however, sales increased by 5.2 percent. More than 85 percent of Home Depot stores are located in U.S. where sales showed an increase of 5.8 percent.

Home Depot (NYSE:HD) registered an increase of 5.4 percent in net sales to $20.52 billion. As per Thomson Reuters I/B/E/S, earnings per share of $1.13 and revenue of $20.47 billion were expected. The shares of the company had increased by 6.5 percent when markets closed on Monday.

In the most recent press release, Home Depot (HYSE:HD) admitted that this criminal security invasion lasted for six months – from April till September of 2014. Home Depot (HYSE:HD) is now confident that all malware, which invaded their payment system, has been removed, and a new updated encryption device has been added to all locations in the United States.  This new encryption method takes credit and debit card information and scrambles the personal data, so that it is virtually unreadable to criminal hackers.

Canadian-based Home Depot (HYSE:HD) locations will not be privy to this new safety technology for several more months.  It was believed that these stores were less vulnerable to virtual criminal activity, because they had special check out terminals, known as chip and pin terminals.   It has been estimated that approximately four million cards have been comprised in Canada, but Home Depot (HYSE:HD) will not confirm this number.

Home Depot (HYSE:HD) did say, in the latest press statement, that stores located in Mexico have not been comprised or hacked, and that there has been no criminal evidence; that customers who have shopped at HomeDepot.ca or HomeDepot.com have been affected by this security breach.

It is common practice for a retail establishment to offer an identity protection service, free of charge for 12 months, to their customers.  This type of service usually includes monitoring of credit card activity for customers, who use and prefer this method of payment.

Brian Krebs, a reporter for the Washington Post, and the author of a website, known as “Krebs on Security”, first reported this Home Depot (HYSE:HD) security breach on September 02, 2014, and it was confirmed that a large amount of stolen debit and credit card numbers went on sale, underground, of course.

Stolen credit and debit cards usually sell on the black market for an average price of $25 each, although the range can be from $10 to $55 for one stolen number.  A debit card that has expiration date of 30 days or sooner can sell for $2.25.  Company-based credit cards and Platinum MasterCard are considered to be the most desirable amongst thieves.

There is significant evidence that points to a group of Ukrainian and Russian hackers; that are responsible for this criminal invasion. This same crime ring may also be responsible for the security breaches that occurred at P.F. Chang’s, Sally Beauty Supply and Target stores.

I’m sure we all appreciate the fact that Home Depot (HYSE:HD) is sorry for the stress, anxiety and inconvenience that their customers had to endure, and that they take security measures seriously.  But in the wake of this major theft, that affected thousands of individuals, a little honesty would be nice – such as: we at Home Depot (HYSE:HD) value our customers, and although we do our best to keep your credit card data safe, we messed up and failed.  We sincerely apologize and will do better starting today.

The Home Depot (HYSE:HD) stock opened at 91.79 this morning and by 11:00am EDT is was holding at 91.90.  The 52 week range for Home Depot (HYSE:HD) is between 7.74 and 93.75.

Several other companies also became target to data security breach. Amongst others, Amazon Inc (NASDAQ:AMZN) and The Home Depot, Inc (NYSE:HD) were subjected to quite brutal attacks. It was much worse for The Home Depot, Inc (NYSE:HD), where 56 million credit card details where lost to hackers. Millions of customers reported unwarranted activities on their credit cards and lined up to register their complaints. This is being dubbed as the worst security breach in the history of customer data collection.

This hits the vendor of the credit card much worse than other parties involved. In case of an unauthorized or un verified transaction, the vendor ends up paying charge back fee; moreover they mostly do not get any refunds for the items that get shipped out as a result of these fraudulent transactions. These recent incidents have created a fear of using cards as payment methods.

The only good news is that most of the credit card companies are quite friendly and accommodating when handling such hacking issues. However, if the degree of breach or hacking is as big as the one The Home Depot, Inc (NYSE:HD) was hit with, it usually becomes a challenge for investigation teams at the credit card companies to track all victims and indentify hackers. These breaches also bring in law enforcement agencies such as FBI that play a vital role in tracking the source of the breach.

It is quite a dilemma where almost 56 million account information is vulnerable and at some random hacker’s mercy. The recent reports are not the only breaches to have occurred; many small and large corporations become a victim on a regular basis. However companies usually try to keep these breaches private due to the fear of bad press and customer loss. But when a breach occurs on a massive scale, it becomes impossible to keep the information from appearing as headlines.

A breach of 56 million customer accounts is an issue that can’t be forgotten easily. Home Depot, Inc (NYSE:HD) should look into having a better customer data security system in place. In addition, to keep their reputation intact, it must ensure that afflicted buyers are compensated in some way.

It needs to be understood that any transaction or activity that is done online is open to cyber crimes such as hacking. Therefore online shopping and transaction methods need to be upgraded and made more secure. Innovations such as Apple Inc. (NASDAQ:AAPL)’s Apple Pay seem to be a step forward in the right direction. However this technology is still in its nascent stages and is bound to show its own weaknesses. But it seems to be a solution that may just work, at least for a while before hackers figure out a way around it.

People who quit Home Depot (NYSE:HD)s IT department are now surfacing after the attack to reveal what really went on at the company. Having warned the management for years that the retail systems were prone to cyberattacks because of the infrequent scans that were conducted, the management responded by scanning a couple of stores out of the hundreds all across the country. This was nothing substantial in the eyes of the IT managers who quit the company showing their level of dissatisfaction towards the managements’ attitude.

Two years ago, Ricky Joe Michell was hired as the senior security IT architect after he had totally destroyed the network of EnerVest Operating for a whole month. This was to teach the company a lesson for firing him! A year ago his comments about his act were made public but Home Depot (NYSE:HD) didn’t bat an eyelash and he was still responsible for the security architecture. Giving Home Depot (NYSE:HD) the benefit of the doubt one could say they didn’t want a similar scandal on their hands and let Ricky continue.

Finally, when he pled guilty in January 2014 and Home Depot (NYSE:HD) had legal evidence that Ricky would be vindictive when vengeful did they finally let him go. The breach which happened in April was reported to have happened due to the BlackPOS malware and Home Depot (NYSE:HD) officials claimed that it would have been difficult to detect with its security scans. Yes ofcourse, if you conduct the security scans so irregularly and no third party audit is conducted then yes, you could not have seen the malware in your network with those inadequate scans.

Even the IT security team was not allowed to check all the systems handling the customer data, reported its former IT department employees. Seeing such a lack of network security, employees knew calamity could hit any moment and they warned their friends not to use credit cards when shopping at the Home Depot (NYSE:HD) and go back to the primitive method of using cash. Sadly they could not warn the estimated 56 million credit card holders who used their cards at the retailer and are now regretting it.

Home Depot (NYSE:HD)s spokesperson Stephen Holmes said that the company remains ‘robust security systems’ at their outlets. I would really like them to describe in great detail how they define a robust security system at Home Depot (NYSE:HD) because if a robust security system is not secure then what is? However, the former employees have already proved Stephen wrong with their comments.