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The firm also neglected to use multi-factor authentication to secure remote access by customers and failed to provide adequate formal training for staffers and management.
The Ashley Madison site featured security representations, including "Trusted Security Award, which investigators found appeared to have been fabricated.
Cinderella Escorts first made headlines in 2016 after an 18-year-old Romanian model, Alexandra Kefren, reportedly sold her virginity to a Hong Kong businessman for £2m.
A separate compliance agreement on privacy safeguards, record-keeping and other issues with Canadian and Australian authorities was announced with ruby Corp. The settlement includes proposed federal court orders to impose .5 million in judgments against the company.
Half of that amount, .75 million, would be suspended, based on the company's financial condition, if the firm pays 8,500 to the FTC and an identical amount to be shared by the states.