Facebook Expected to Settle SEC Claims of Inadequate Disclosures Over Privacy Practices
July 23 2019 - 10:28PM
Dow Jones News
By Emily Glazer
The Securities and Exchange Commission is expected to announce a
settlement with Facebook Inc. on Wednesday related to claims it
inadequately disclosed risks involving its privacy practices, a
person familiar with the matter said.
The settlement, which is expected to include a fine larger than
$100 million, focuses on allegations the social-media company
insufficiently warned investors that developers and other third
parties may have obtained users' data without their permission or
in violation of Facebook policies, the person said.
The SEC began probing Facebook after revelations that Cambridge
Analytica, a data-analytics firm that had ties to President Trump's
2016 campaign, got access to information on millions of Facebook
users.
Around that time, the SEC requested information from Facebook as
it sought to understand how much the company knew about Cambridge
Analytica's use of the data and how Facebook analyzed the risk it
faced if developers were to share data with others in violation of
its policies, The Wall Street Journal previously reported.
The SEC is one of several government agencies investigating
Facebook and its handling of user data. It enforces securities laws
governing what must be disclosed to shareholders so they can make
informed investment decisions.
The likely SEC settlement coincides with an expected Federal
Trade Commission settlement with Facebook as soon as this week that
includes a roughly $5 billion fine related to its privacy
practices, The Wall Street Journal previously reported.
https://www.wsj.com/articles/ftc-approves-roughly-5-billion-facebook-settlement-11562960538
Facebook is set to report its quarterly earnings after the stock
market close on Wednesday.
The SEC didn't immediately respond to a request for comment.
Facebook declined to comment.
(END) Dow Jones Newswires
July 23, 2019 22:13 ET (02:13 GMT)
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