“Ticketmaster employees have repeatedly – and illegally – accessed an unauthorized competitor’s computers using stolen passwords to collect business information illegally,” Attorney General Seth DuCharme said on Wednesday in a press release.
The company will pay the fine to resolve a five-count criminal information filed on Wednesday, including conspiracy to commit computer intrusion, computer intrusion into a protected computer, computer intrusion promoting fraud, electronic fraud and fraud conspiracy electronics.
According to the unsealed deferred lawsuit settlement on Wednesday, a former Ticketmaster employee named Zeeshan Zaidi went to work for Live Nation in 2013 as a consultant and was hired full-time to work for Ticketmaster in 2014 after leaving a competing company, which has no name in the lawsuit.
Zaidi reportedly had access to usernames and passwords of the unidentified competitor and used them without authorization to access that company’s systems while working for Ticketmaster between 2013 and 2015. The deferred prosecutor’s agreement states that the information obtained from accessing the systems was used, among other things, to prepare “strategy presentations for senior executives of Live Nation and Ticketmaster who compare competing products and services”, including those offered by the competing company.
A press release from federal prosecutors said that Ticketmaster employees held a summit meeting across the division during which stolen passwords were used to access the victim company’s computers “as if it were an appropriate business tactic”.
According to the deferred prosecution agreement, a Ticketmaster executive described the goal as “stifling” the victim company and “stealing back” one of its customers.
Zaidi was fired from Ticketmaster in 2017 and pleaded guilty in Brooklyn federal court in 2019 to a charge of conspiring to access unauthorized protected computers and committing electronic fraud, according to the deferred prosecution agreement. Zaidi’s sentence has been postponed, according to court records. CNN contacted its lawyers for comment.
“When employees leave one company and enter another, it is illegal for them to take proprietary information with them,” said assistant FBI director William Sweeney, whose office is conducting the investigation. “Ticketmaster used stolen information to gain an edge over the competition and then promoted employees who broke the law.”
In a remote lawsuit on Wednesday, Ticketmaster General Counsel Michael Rowles, a LiveNation subsidiary, entered into the deferred indictment agreement and waived the company’s right to have an indictment proceeding on behalf of Ticketmaster, with authorization from the board , he said in the remote lawsuit on Wednesday.