SEC Joins Federal Facebook Probe As Scope Broadens

The involvement of so many agencies confirms that the investigation is broadening in scope.

Courtesy of Zero Hedge

The federal government is ramping up scrutiny of Facebook's role in the Cambridge Analytica data privacy scandal as yet another federal agency – the Securities and Exchange Commission – has joined the Federal Trade Commission, the FBI and the DOJ in their investigation of the tech giant, according to the Washington Post.

The involvement of so many agencies confirms that the investigation is broadening in scope. The addition of the SEC suggests that the emphasis has shifted to whether "representations" made by the company "square with the underlying facts."

While the report didn't include any specifics about the investigation, Facebook CEO Mark Zuckerberg, who sat for a grueling two-day testimony before Congress in April, has since been called out by at least one Democratic Congressman for possibly lying, or otherwise misleading Congress, when he claimed Facebook users had "complete control" over who sees their data. In reality, the New York Times reported that Facebook had given at least 60 major device manufacturers nearly unfettered access to user data. WaPo reported that Zuckerberg's testimony is being "scrutinized."

Representatives for the FBI, the SEC and the Federal Trade Commission have joined the Justice Department in its inquiries about the two companies and the sharing of personal information of 71 million Americans, suggesting the wide-ranging nature of the investigation, said the people, who spoke on the condition of anonymity to discuss a probe that remains incomplete.
These people added that the emphasis has been on what Facebook has reported publicly about its sharing of information with Cambridge Analytica, whether those representations square with the underlying facts and whether Facebook made sufficiently complete and timely disclosures to the public and investors about the matter. The Capitol Hill testimony of Facebook officials, including chief executive Mark Zuckerberg, also is being scrutinized as part of the probe, said people familiar with the federal inquiries.

Facebook told WaPo that it's cooperating in the probe, and that it had received questions from federal agencies and is working to provide answers as best it can. In a separate probe, the DOJ is also investigating Cambridge Analytica, the data analytics firm that purportedly accessed the data of 71 million American Facebook users without Facebook's – or the users' – consent. The FTC disclosed in March that it had launched an investigation into whether Facebook had violated a consent decree over its handling of personal data – a violation that could potentially lead to more than $1 trillion in fines.

And given that the SEC is now involved, it's possible that the timing of CEO Mark Zuckerberg's stock sales has also come into play.

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