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Ashley Madison Hack Ranks Among the Top Scandals of 2015, Even Though the Press Barely Has Touched Key Elements of the Extramarital-cheating Story

Posted on the 26 January 2016 by Rogershuler @RogerShuler

Ashley Madison hack ranks among the top scandals of 2015, even though the press barely has touched key elements of the extramarital-cheating storyThe hack of the Ashley Madison extramarital-affair Web site is one of the top 10 scandals of 2015, according to USA Today. Meanwhile, Wired magazine named Ashley Madison (AM) one of the 11 biggest hacks of the year.
Those rankings come even though major elements of the AM story have barely been touched in the press. We plan to change that in 2016. In fact, we maintain that the most important aspects of the AM story still are be uncovered.
The New York Post seems to be of a similar mindset. In late October, it published a story titled "The storm isn't over yet for Ashley Madison cheaters." That headline gets to the heart of an AM issue that largely has gone uncovered.
Who are the Ashley Madison paying customers? Who are these people, the ones willing to cough up cash in hopes of lining up a partner to help cheat on their spouses? Are these "cheaters" (to borrow an NY Post term) from the fringes of society. Are they borderline criminals or sociopaths, the types known for failing to abide by societal norms?
Our examination of AM lists from two states--Alabama and Missouri--suggests the answer to those last two questions are a solid no. In fact, we've found that many AM customers would be considered among our nation's "best and brightest," enjoying status as true elites.
We're talking doctors, lawyers, engineers, accountants, dentists, chiropractors (lots of chiropractors), military leaders, law-enforcement officials, wealth managers (lots of wealth managers, especially in the "old money" areas of Birmingham), CEOs, COOs, Sr. VPs, and much more.
Who are these elites who seem drawn to cheating, and what do their dalliances with AM say about their values and ethics? We intend to examine those questions closely in the early weeks of 2016.
Meanwhile, what are others saying about the Ashley Madison story? This is from USA Today:


Hackers who stole customer information from the cheating site AshleyMadison.com dumped nearly 10 gigabytes of data to the dark web this year, fulfilling a threat to release sensitive information including account details, log-ins and credit card details, if Avid Life Media, the owner of the website didn't take Ashley Madison.com offline permanently.
In August, the group who hacked into Ashley Madison, doubled down, posting what appears to be another 20 gigabytes of data — including the CEO's emails.
Analysis of the email addresses in the databases show that most come from webmail providers, said Robert Hansen, vice president of WhiteHat Labs at the computer security company WhiteHat Security, which independently studied the data.
The top most-used domains were Gmail.com, with 8.7 million, Yahoo.com with 6.6 million, Hotmail with 6.2 million and Aol.com with 1.2 million, Hansen found.
Surprisingly, there were at least 13,000 addresses from military and government emails with .mil and .gov addresses.

Here is Wired's take:
The breach of AshleyMadison.com, a site that touted itself as the premier platform for married individuals seeking partners for affairs, was loud and flashy and deserves the award for brazenness. Exactly one month after their hack of the cheating site went public, the hacker or hackers behind the breach made good on a threat to release sensitive company data, dropping more than 30 gigabytes of internal company emails and documents, as well as details and log-in credentials for some 32 million accounts with the social networking site. The data included names, passwords, addresses, and phone numbers submitted by users of the site. Although many of the personal account details were fabricated by users to remain anonymous, the hackers also released seven years worth of credit card and other payment transaction details, which exposed the real names and address of many customers. Reality TV star Josh Duggar was among those exposed by the breach. The company has been hit with several lawsuits from irate customers who accused the cheating site of being negligent in protecting their data.

Perhaps the essence of the Ashley Madison story can be found in a 2013 Newsweek article titled "Wall Street Loves a Cheater." The story was written roughly two years before the hack, but it speaks volumes about the way financial elites viewed a site whose motto is "Life is short; have an affair." From the Newsweek piece:
Headlines in tabloids and even so-called respectable newspapers – think of the Anthony Weiner sexting scandal – and gossip television shows underscore America's fascination with unfaithfulness. In recent years, websites devoted to relationships, including match.com and JDate, have become publicly traded companies (the latter's parent company's ticker symbol: LOV). America has plenty of "sin" businesses – gambling, liquor and cigarette companies are pillars of the New York Stock Exchange. Even the American Association for Retired People, better known for tips on arthritis and prostate screenings, reports a steep drop in the percentage of members who think nonmarital sex is wrong – to 22 percent in 2009, from 41 percent a decade earlier. "Ashley Madison is attracting people who may have always been inclined to cheat," says Peggy Drexler, an assistant professor of psychology in psychiatry at Weill Medical College at Cornell University. "But the site is also providing a previously unavailable opportunity to those who might in years past have chosen not to cheat. . . . "
American investors who get in on Ashley Madison would join a clutch of Canadian hedge funds that have already made a killing, raking in over $90 million in cash dividends since 2009, Biderman says. But like a cheating spouse, those Canadian investors don't want their identities known. Ashley Madison "is a remarkably good business," says one money manager at a Canadian asset management firm with $1 billion in assets who declines to name himself or his firm, citing fears of a public backlash. He says his firm has made 25 percent a year on its stake since investing in 2008. "It's recurring, has high margins, high free cash flow, requires little capital, has a rock-like balance sheet and is exceptionally well run by its passionate CEO."

That "passionate CEO," Noel Biderman, resigned in August after the site was hacked in July.  E-mails leaked from the hack show that Biderman himself had engaged in multiple affairs, suggesting he was a bit too passionate for his own good. The company now is awash in lawsuits, totaling more than $500 million, and the litigation figures to drag on for years.
Maybe the company wasn't so well run after all.

Ashley Madison hack ranks among the top scandals of 2015, even though the press barely has touched key elements of the extramarital-cheating story

Noel Biderman

The Birmingham law firm Heninger Garrison Davis has filed multiple class-action lawsuits against Biderman and Avid Life Media (Ashley Madison's parent company).
That means there will be multiple Alabama angles as the Ashley Madison story plays out in 2016. According to a report at Business Insider, Alabama leads the nation in per-capita spending on Ashley Madison.

Who are some of those big spenders? We will be shining light on that question in the weeks ahead.

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