Ken Griffin’s Data Leak Suit Against IRS Ends With Settlement

Sabrina Willmer and David Voreacos, Bloomberg News

Pedestrians wearing protective masks walk past the Internal Revenue Service (IRS) headquarters in Washington, D.C., U.S., on Friday, March 19, 2021. The IRS is delaying the April 15 tax-filing deadline to May 17, giving taxpayers an additional month to file returns and pay any outstanding levies. Photographer: Samuel Corum/Bloomberg , Bloomberg

(Bloomberg) -- The US Internal Revenue Service agreed to settle a lawsuit brought by hedge fund manager Ken Griffin that accused the agency of failing to protect his confidential financial information from a contractor who stole his tax data and leaked it to ProPublica.

Both parties on Monday filed to dismiss the case in Florida federal court. The case is being dismissed because the IRS and Citadel LP’s founder reached an agreement to resolve the matter, according to a person familiar with the situation who asked not to be identified discussing confidential information.

Griffin sued over a data breach that resulted in ProPublica’s revealing private data on some of the wealthiest US taxpayers. A former IRS contractor, Charles Littlejohn, pleaded guilty to stealing and leaking the tax returns of Griffin, former President Donald Trump, Elon Musk and other billionaires. He was sentenced on Jan. 29 to five years in prison.

In his lawsuit, Griffin accused the IRS of failing to put in place proper safeguards. He originally sought $1,000 in damages for each unauthorized disclosure of his tax return information and demanded that the IRS adopt a data security plan. But during settlement discussions, Griffin didn’t ask for financial damages and none were given, said the person. Michael Bloomberg, majority owner of Bloomberg News parent Bloomberg LP, was also part of ProPublica’s reporting.

The case is Griffin v. Internal Revenue Service, 22-cv-24023, US District Court, Southern District of Florida.

(Updates with more detail on settlement)