Sounds like a Scapegoat... (Score 1)

Too many issues here to miss. 1) New employee with access to LIVE data. 2) Copy/Pasted code... (implies company provided the code...) 3) Conveniently mentioned backups not working 4) Mention of Legal action. This poor sap was hired to be a scapegoat. They probably had issues meeting production goals or some sort of milestone and it was a convenient happening that a new tech guy broke the whole damn thing. Unfortunately it is hard to prove who knew what but. In my opinion the CTO should be the one who legal action should be taken against. The company should protect the new hire and isolate him from the CTO and immediate supervisors to investigate the job/code/work he was doing and who told him to do what. Also they should investigate who gave him access to LIVE data and Admin level controls of that data. Although I suspect that the this was a crime against the shareholders/investors and the whole management team should be held accountable. Just my $.02