Controversial data harvester Cambridge Analytica goes into administration

Crowe Clark Whitehill has been appointed as administrators to Cambridge Analytica, the company which has become mired in controversy over claims it used the personal data of millions of Facebook users to sway the outcome of the US 2016 presidential election and the UK Brexit referendum and which has now ceased all operations, citing adverse media coverage

The administrators are also appointed to Cambridge Analytica’s parent company, SCL Elections Ltd, as well as certain of its and Cambridge Analytica’s UK affiliates.

Additionally, the political consultancy said parallel bankruptcy proceedings will soon be commenced on behalf of Cambridge Analytica and certain of the company’s US affiliates in the United States Bankruptcy Court for the Southern District of New York. 

In a statement on its decision regarding the insolvency, Cambridge Analytica said: ‘Over the past several months, Cambridge Analytica has been the subject of numerous unfounded accusations and, despite the company’s efforts to correct the record, has been vilified for activities that are not only legal, but also widely accepted as a standard component of online advertising in both the political and commercial arenas.’  

The company said that in response, it had retained barrister Julian Malins to conduct an independent investigation into the allegations regarding the company’s political activities. Malin’s report, posted on its website, concluded that the allegations were not ‘borne out by the facts’.

In the report’s conclusions, Malins stated: ‘I had full access to all members of staff and documents in the preparation of my report.  My findings entirely reflect the amazement of the staff, on watching the television programmes and reading the sensationalistic reporting, that any of these media outlets could have been talking about the company for which they worked.  Nothing of what they heard or read resonated with what they actually did for a living.’

 Cambridge Analytica said it had ‘unwavering confidence’ that its employees have acted ethically and lawfully.

However, the company said:  ‘The siege of media coverage has driven away virtually all of the company’s customers and suppliers.  As a result, it has been determined that it is no longer viable to continue operating the business, which left Cambridge Analytica with no realistic alternative to placing the company into administration.’

Despite what it described as its ‘precarious financial condition’, Cambridge Analytica said intends to fully meet its obligations to its employees, including with respect to notice periods, severance terms, and redundancy entitlements.

According to Facebook, data about up to 87m of its members was harvested by a quiz app and then passed on to the political consultancy. Cambridge Analytica CEO Alexander Nix resigned a few weeks ago following widespread media coverage of conversations in which he apparently gave details of tactics used by the firm to swing elections around the world.

Report by Pat Sweet

 

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