Yahoo Finance US market regulator probing Facebook's Cambridge Analytica disclosures to investors
The US Securities & Exchange Commission is said to be investigating whether Facebook adequately informed investors about the Cambridge Analytica data leak when it first learned of it in 2015, as the technology giant comes under increasing pressure from regulators on both sides of the Atlantic.
The Wall Street Journal, citing sources, said the SEC had requested information from Facebook over how much it knew about what Cambridge Analytics was doing with data harvested from its users and over its subsequent disclosures to the market.
The regulator is also thought to have sought information on how Facebook assessed the risks surrounding developers of third-party apps and the likelihood of them sharing data.
It follows the revelations earlier this year that a quiz app created by data scientist Dr Aleksandr Kogan had collected data from around 87 million Facebook users, despite only being downloaded by 305,000 people, and passed that data on to political campaigning group Cambridge Analytica, in breach of Facebook policies.
Facebook became aware that data from its users had been sold on in 2015, at which point it asked Mr Kogan and Cambridge Analytica to delete the data, although did not tell users that their data may have been shared until March this year when the scandal first came to light.
The SEC probe is just one of many that have been launched in the past four months. The Federal Bureau of Investigation in June said it was looking into whether Facebook had hidden details of the scandal, and investigations have also been launched by the Federal Trade Commission and the Department of Justice in the US, as well as the Information Commissioner's Office in the UK and EU lawmakers.
Earlier this week, the ICO handed Facebook the maximum penalty of £500,000 after finding the company had failed to protect users' information and had allowed it to be harvested.
Information Commissioner Elizabeth Denham had said the ICO was "concerned about data negligence, the lack of boundaries and the lack of due diligence around data research".
Had the breach taken place after General Data Protection Regulation came into force in May, Facebook could have been hit with a fine of up to £1.2bn.
Both the SEC and Facebook declined to comment on the report, although Facebook has previously said it is "cooperating with officials in the US, UK and beyond".
"We’ve provided public testimony, answered questions, and pledged to continue our assistance as their work continues," a spokesman for the company had said.
