SEC Probes Why Facebook Didn’t Warn Sooner on Privacy Lapse

Apparently, the Securities and Exchange Commission is investigating whether Facebook adequately warned investors that developers and other third parties may have obtained users’ data without their permission or in violation of Facebook’s policies. The Securities and Exchange Commission’s probe of the social-media company, first reported in early July 2018, follows revelations that Cambridge Analytica, a data-analytics firm that had ties to President Donald Trump’s 2016 campaign, got access to information on millions of Facebook users. The SEC has requested information from Facebook seeking to understand how much the company knew about Cambridge Analytica’s use of the data, these people said. The agency also wants to know how the company analyzed the risk it faced from developers sharing data with others in violation of Facebook’s policies, they added.

The Justice Department and the Federal Trade Commission are also probing the data leak and how Facebook and other parties handled it. The FTC is probing whether Facebook violated terms of an earlier consent decree requiring the company to get user consent for collecting personal data and sharing it with others. The SEC is probing whether Facebook should have disclosed to shareholders its knowledge of the Cambridge Analytica violation in 2015, when it learned that Aleksandr Kogan, a professor at the University of Cambridge, had improperly shared data in 2014 for as many as 87 million Facebook users with Cambridge Analytica.