EMC expects RSA breach to cost US$81.3 million

Much bigger than the US$66 million it previously revealed.

EMC has squirrelled away US$81.3 million in reserve to cover the cost of customer remediation in response to the attack on RSA’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 “hardening” 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 “substantially completed”, EMC reported in its 10-Q filing lodged with the Securities and Exchange Commission last Friday.

“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,” EMC reported in the filing.

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

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