Desjardins Group replaces two senior leaders after massive privacy breach

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Desjardins Group is shaking up its senior leadership ranks in the wake of a massive privacy breach that hit all its 4.2-million members earlier this year.

The Quebec-based banking co-operative said Tuesday it has severed ties with chief operating officer Denis Berthiaume, the institution’s second highest-ranking executive, as well as with information technology chief Chadi Habib.

Both men are no longer employed with Desjardins effective immediately, the group said.

"Trust between a president and their management committee is essential. In light of the events of the last few months, I’ve decided changes must be made to our senior management team,” Desjardins Group president and CEO Guy Cormier said in a statement.

Desjardins stunned clients and observers last month when it revealed that a theft of customer data it disclosed in June was much worse than first thought. Based on new information provided by police, the co-operative said information belonging to 4.2 million members were compromised, up from an initial tally of 2.9 million.

The personal information includes names, birth dates and social insurance numbers on largely personal accounts, according to Desjardins. Account access information such as passwords were not accessed, the group has said.

The data breach, among the largest known leaks in the Canadian financial services sector, has rattled Desjardins and forced it to the defensive. Mr. Cormier was summoned in front of Quebec politicians last month to explain the situation, an appearance in which he said Desjardins was not the first company to experience fraud from an employee.

What happened to Desjardins amounts to “a brutal wake-up call that shouldn’t be wasted,” Mr. Cormier told a legislative committee. He called for better protection of personal data by all those who keep it, including governments.

A rogue employee at Desjardins was behind the data leak, the co-operative has said. The person has since been fired and a police investigation continues.

Desjardins offered identity-theft protection and fraud insurance free of charge to its members as a result of the breach. It also launched an internal review. The senior executive changes are based on the findings of the review, Desjardins said in Tuesday’s statement. It did not elaborate.

Desjardins has named Réal Bellemare, chief financial officer, to replace Mr. Berthiaume. Mr. Bellemare will also take over Mr. Habib’s duties as executive vice-president of information technology on an interim basis, the group said. Alain Leprohon, currently vice-president of finance, takes over as CFO.

One of Mr. Bellemare’s main tasks will be to form what Desjardins calls a new “security office.” The bureau will co-ordinate initiatives across the group and put in place integrated, cross-sector security strategies to protect Desjardins members and clients, the co-operative said.