AT&T Faces Court Over User Data Protection Failures

According to Cointelegraph, AT&T will return to court to face charges of failing to protect user information after a part of a summary judgment in its favor was overturned on appeal. The case originated in 2020 when crypto investor Michael Terpin sued a recent high school graduate for stealing $24 million in cryptocurrency through a SIM swap that bypassed two-factor authentication on one of Terpin’s crypto wallets. Ellis Pinsky, who was 15 in 2018, and an accomplice bribed an AT&T employee to transfer Terpin’s SIM card information onto a blank card in their phone. This led to a complex legal battle that earned Pinsky the nickname “Baby Al Capone” and involved him in a potentially precedent-setting case against AT&T. The Ninth Circuit Court of Appeals found that Terpin’s claims were rightfully dismissed, except for the claim under Section 222 of the Federal Communications Act, which protects SIM card information. The court did not reinstate Terpin’s fraud claim against AT&T or his demand for $216 million in punitive damages. Terpin’s lead attorney, Pierce O’Donnell, stated that Terpin will now seek “$24 million plus at least $14 million of interest plus his attorney’s fees for a total of at least $45 million” from AT&T. Initially, Terpin brought 16 charges against AT&T, but only three were allowed to proceed. Terpin used his investigative skills to track down Pinsky, who returned $2 million to him. In May 2020, after Pinsky had turned 18, Terpin sued him for $71.4 million — the balance of the stolen funds plus three times the damages as allowed for racketeering charges. Pinsky agreed to testify on Terpin’s behalf in the case against AT&T. Terpin also sued Pinsky’s accomplice, Nicholas Truglia, for $75.8 million in 2019 and won the case. Truglia was 21 at the time of the heist. The dramatic events surrounding Truglia and Pinsky’s meeting online were documented in a feature story in Rolling Stone in 2022. Pinsky recently graduated from New York University.