GIA invalidates 1,042 reports due to hacking

Carlsbad, Calif.--The Gemological Institute of America has invalidated and is recalling grading reports for 1,042 stones after hackers gained access to its database and altered the reports.

According to a notification circulated to the trade on Friday, most of the stones attached to the grading reports in question were submitted to the GIA’s lab in India in July and August. They were graded in full or in part at other GIA labs, including New York and its headquarters in Carlsbad.

At some point between the conclusion of the grading process and the printing of the reports, one or more now-former employees of Tata Consultancy Services (TCS) gained “unauthorized remote access” to GIA’s grading information database and altered the color and/clarity grades on the 1,042 reports, GIA said. TCS, an IT firm, is the contractor that supports GIA’s databases worldwide.

These individuals were acting “at the behest of other parties unrelated to GIA or TCS,” said GIA, which discovered the discrepancies via its internal controls and launched an investigation together with TCS.

Though the lab would not release any more specifics about these “other parties,” it noted in the news release circulated Friday that it has suspended the clients who submitted the 1,042 diamonds for grading from further submissions as the investigation continues.

When asked why the clients were suspended, GIA spokesperson Stephen Morisseau said that the lab can suspend clients when it “reasonably suspects” that there’s been some sort of violation of the terms of its client agreement. 

Though TCS could not be reached directly for comment late Friday, the GIA said in its statement that the IT company had been open and cooperative throughout the investigation, and Morisseau said the lab will continue its “very long and important” relationship with TCS.

“They’ve worked very closely with us to identify the scope of this unauthorized activity, which was a violation of their internal controls as well,” he said.

The hacking is the latest in a string of incidents made public by the GIA this year, a year in which dealers are struggling in the face of sluggish worldwide demand for diamonds and slim margins.

In May, the GIA recalled hundreds of diamonds and cut off four clients for allegedly submitting stones with an undisclosed--and still not yet fully understood--treatment that improves their color by as much as four grades.

In August, the GIA cut off another client