As potential legal liabilities for the company behind Ashley Madison, a dating site for married people, continue to mount, the firm's co-founder and CEO has stepped down. A statement issued today by Avid Life Media said Noel Biderman, "in mutual agreement with the company," will no longer work with the organization he helped launch in 2001.
Until a new CEO is appointed, "the company will be led by the existing senior management team," according to a statement. That team and Biderman's eventual successor will be left to deal with the fallout of a July hack that earlier this month saw the public release of information about millions of Ashley Madison's customers.
On August 18, a group calling itself the "Impact Team" that took responsibility for breaking into Ashley Madison's systems earlier this summer published 9.7 gigabtyes of data about the site's users on the dark web. Since then, Avid Life Media has been hit with several class action lawsuits that could see the company on the hook for hundreds of millions of dollars in damages, while further data dumps have implicated Biderman and other company officials in some questionable behavior.
'in the Best Interest of the Company'
A second, even larger, dump of data -- about 19 gigabytes' worth -- from the Ashley Madison hack appeared online two days after the first. It contained an opening message that stated, "Hey Noel, you can admit it's real now," presumably in response to Biderman's comments after the first dump that alleged the data was not legitimate.
Today's statement from Avid Life Media noted that Biderman's departure is "in the best interest of the company and allows us to continue to provide support to our members and dedicated employees. We are steadfast in our commitment to our customer base."
Based in Toronto, Avid Life Media operates two other Web sites in addition to Ashley Madison: Established Men, a site for women seeking "rich, successful men," which was also targeted by the Impact Team, and CougarLife.com, a site aimed at single women that was not apparently affected by the hack. Together, the three sites reported in excess of 38 million users.
In 2014 Avid Life Media reported gross revenues of $115 million, according to an analysis earlier this year by Forbes. That was nearly triple the company's earnings in 2010.
Months or Years of Fallout Likely
The legal liabilities likely to hit Avid Life Media are "endless and the impact could be felt over the duration of months and even years," Tom Kellermann, chief cybersecurity officer at Trend Micro, told us last week.
Lawsuits already filed against the company include a class action on behalf of all of Ashley Madison's Canadian subscribers and several suits filed in California and Alabama courts on behalf of "John Doe" plaintiffs in the U.S.
Analyses of a third data dump following the hack also revealed some 200,000 e-mails sent to and from an Avid Life Media account identified as belonging to Biderman. Those e-mails suggested he might have been involved in multiple affairs during his tenure at the company; other leaked data indicated the company's leadership was itself behind a hack of a competing online dating site. Law enforcement authorities are continuing to investigate the hacking incident.