SEC complaint against Facebook

Facebook is facing many issues these days. The Company was charged with the Cambridge Analytica scandal last year. Now, the SEC’s complaint filed against the Company states that Facebook employees tried to warn the company about this scandal in 2015. However, Facebook ignored staff warning. A similar court filing earlier this year also stated that Facebook knew about the different concerns regarding the controversial data company.

Facebook kicked the data company from its platform in March 2018. However, investigative journalists had already started looking for clues by that time. The SEC complaint reveals that Facebook already knew about the different warnings by Facebook’s political advertising department, regarding the CA. They also warned that it was a sketchy modeling company.

Facebook just faced a big scandal in which the FTC fined it $5 billion. While all the media was focusing on this story, Facebook quietly revealed that it would give $100 million to the SEC to settle the complaint about failures. The Company CEO, Mark Zuckerberg also didn’t mention the SEC settlement in his Facebook post. He just mentioned the FTC fine and called it a ‘historic fine’.

This latest FTC fine settlement is like a “get out of jail” move for Facebook because it gives it immunity from every mistake it ever made. Therefore, calling it a historic and big fine isn’t that true. Facebook is a multi-billion dollar company and it can easily afford this fine.

By paying attention to the FTC fine, Facebook hopes to detract the media’s attention from the SEC complaint because there are some disturbing revelations in the complaint. The complaint states that Facebook staff was aware of CA activities before December 2015. However, Mark Zuckerberg states that he became aware of the issue in December 2015.

The Facebook staff also knew about the Cambridge Analytica “sketchy” business in November 2015. Facebook’s psychological researcher, Joseph Chancellor, was the developer who put the company at risk and gave the data to CA. So, this means that Facebook hired a person who went against the Company’s policies by selling user data. However, the staffers knew about it months before.

Facebook has never given a straight answer as to why it hired Chancellor. It also hasn’t given any details or records of Chancellor’s previous work. When the media reaches the Company for a response, it always has a dead-end answer. The spokesperson person says, “Mr. Chancellor was a quantitative researcher on our team and his work was regarding virtual reality. However, he is no longer a part of our team, after the Cambridge Analytica scandal.”

Other than this, there are other awkward details in the SEC complaint. For example, there is an agreement signed by GSR’s co-founder Aleksandr Kogan. He said in June 2016 that, in addition to giving the 30M user data to CA, he sold it a huge amount of Facebook data to the same individuals it had profiled.

In March 2018, the scandal came out and revealed that giving user data to Cambridge Analytica was a disaster, which made the company lose billions of dollars. Therefore, the real question that arises is that why Facebook employed Joseph Chancellor in the first place? Facebook has never presented Chancellor for any media questions. He quietly left Facebook last fall, with a big exit package.

The SEC complaint also states that over 30 Facebook employees from different departments became aware of Kogan’s policy violations. These 30 people also included senior managers.

The UK’s data watchdog has already identified three senior Facebook managers who knew about Cambridge Analytica. They continuously emailed each other constantly regarding the issue. However, the watchdog hasn’t released their names.

In crux, the SEC complaint suggests that many Facebook employees knew about the Cambridge Analytica scandal beforehand. Still, Facebook ignored staff warnings. However, the complaint doesn’t specify the exact timeline when the staffers knew about this issue. It is somewhere between September 2015 and April 2017.

The SEC states, “Many employees warned Facebook about CA. There was also an article posted in the Guardian regarding CA, which should have raised red flags within the Company. However, Facebook ignored staff warning and still gave the precious user data to Cambridge Analytica.”