SEC to investigate Facebook for hiding leak from investors and shareholders

Facebook, which was charged with a fine of 500,000 Pounds earlier this week by British Lawmakers will be investigated by the US Securities and Exchange Commission (SEC) for hiding the leak from its shareholders and investors in 2015.

The Commission would be inquiring whether the leak that was first detected in 2015 qualified to be worth mentioning to the shareholders and the investors. According to a report published in the Wall Street Journal, the company did not find the leak severe and decided not to disclose the same to its funders as it didn't pertain to important information such as payment information.

The SEC probe is not the first as various other investigative agencies of the US including the Federal Bureau of Investigation, the Department of Justice and the Federal Trade Commission are already conducting their individual inquiries into Facebook’s handling of users’ data.

Since the scam was uncovered in March, the California-based company has refused to call it a data breach and rather prefers to call it a ‘breach of trust’.

The data that was leaked to the British Political consulting firm Cambridge Analytica, as claimed by the company, was majorly used to create target oriented advertisements regarding the US Presidential elections. The data was first harvested by Cambridge University Professor Dr. Aleksandr Kogan who with the help of his research app harvested data of several users across the world. Participant of the quiz app were given a small reward which was covered by Cambridge Analytica.

Less known to the participants was the fact that Kogan’s app accessed private data of their friends too. This data was then given to Cambridge Analytica, the purpose for which was unknown to Kogan. Following this, data of millions of users were used to created politically targeted advertisements that would have been beneficial in the US Presidential elections. The tech-giant discovered the app and Kogan's activities back in 2015, following which, it had asked Kogan to delete the data. However, the company did not carry out any follow up on the data. 

As soon as the leak was confirmed and was all out in the open March, Facebook admitted to the breach and apologized to all its users.