Bermuda law firm warns rich clients of Panama Papers-style data breach

120-year-old law firm admits that it's been busted and sensitive documents spilled to investigative journalists

A law firm based in Bermuda and operating almost exclusively in tax havens has warned its clients - which include the super-rich, as well as politicians who shouldn't be clients - that it has been targeted in a data breach reminiscent of last year's Panama Papers.

Appleby, founded in 1897, is in the process of writing to customers to warn them of the compromise, which occurred in 2016. It comes after the International Consortium of Investigative Journalists (ICIJ) threatened to open up a cache of files that it claims were leaked to it in September last year.

Appleby admitted that its systems were breached following persistent inquiries made by journalists affiliated with the ICIJ.

It comes after the ICIJ revealed details of a new ‘Panama Papers' in September 2016, shortly after it was leaked the cache of documents. It didn't, at the time, reveal the identity of the law firm that had been cracked.

The ICIJ has already outed former European Commissioner Neelie Kroes, who was in charge of the EU's competition policies from 2004 to 2010.

Kroes was listed as a director of an offshore company linked with a Jordanian businessman in the Bahamas. She claims the company was never operational and that it was a mere "clerical oversight" that caused her to be listed as a director.

And more politicians and wealthy individuals are likely to be outed in a data breach that bears the hallmarks of the compromise of Panamanian law firm Mossack Fonseca in 2015, only revealed months later, in a breach dubbed ‘The Panama Papers'.

"We are committed to protecting our clients' data and we have reviewed our cyber security and data access arrangements following a data security incident last year which involved some of our data being compromised," admitted the firm in its statement issued last night.

It added that it wasn't involved in anything illegal in the territories in which it operates, which include the British Virgin Islands, the Cayman Islands, Guernsey, Jersey, Mauritius, the Isle of Man and the Seychelles. It also has offices in Hong Kong and Shanghai, close to a large chunk of its customers.

"We are an offshore law firm who advises clients on legitimate and lawful ways to conduct their business. We do not tolerate illegal behaviour. It is true that we are not infallible. Where we find that mistakes have happened we act quickly to put things right and we make the necessary notifications to the relevant authorities," claimed the law firm.

It added: "Having researched the ICIJ's allegations we believe they are unfounded and based on a lack of understanding of the legitimate and lawful structures used in the offshore sector."

The Panama Papers scandal implicated a wide range of wealthy people and (wealthy) politicians in offshore tax avoiding businesses.

They included Russian President Vladimir Putin, Icelandic Prime Minister Sigmundur Gunnlaugsson - now an ex-Prime Minister - and Pakistan's former Prime Minister Nawaz Sharif, who has been indicted on two counts of corruption in Pakistan.