FIRST AMERICAN FINANCIAL CORP

First American Financial Corporation, a leading provider of title insurance and settlement services, has engaged in a pattern of financial misconduct through deceptive business practices and systemic governance failures. The Federal Trade Commission filed a lawsuit in July 2022, charging the company with trapping small businesses with hidden terms and surprise fees in its merchant cash advance products. The FTC alleged the company made false claims about fees and cost savings to lure merchants, resulting in a settlement that delivered over $2.6 million in refunds to affected businesses in February 2025.

This conduct is compounded by severe and repeated cybersecurity and disclosure failures central to its core title insurance business. In May 2019, a design defect in a company application exposed 16 years of digitized mortgage records, including bank account numbers and statements, affecting hundreds of millions of documents. The vulnerability was first discovered by an external researcher who attempted to notify the company. The New York Department of Financial Services imposed a $1 million penalty in November 2023 for violations of its Cybersecurity Regulation related to this incident. Separately, the company settled an SEC case in June 2021 for $487,616 for disclosure failures concerning the data breach.