Daily Management Review

Facebook Debacle Forces Cambridge Analytica To Files For Bankruptcy In U.S.


05/18/2018




Facebook Debacle Forces Cambridge Analytica To Files For Bankruptcy In U.S.
Battered by a severe criticism and allegations of irresponsible behavior and carelessness while dealing with private information of Facebook users and using private information for wrongful purposes. The United Kingdom based political analysis and consultancy firm Cambridge Analytica filed for Chapter 7 bankruptcy.
 
The company filed for bankruptcy in the U.S. late on Thursday.
 
Earlier this year, the firm had been at the center of a global controversy of misuse of private data and information of more than 87 million American users of Facebook. It was alleged that the firm used such personal data, acquired from a professor who had acquired the data with consent of the users for academic purposes, during the 2016 Presidential elections in the U.S. It was alleged that the firm was reportedly hired by President Donald Trump’s 2016 U.S. election campaign. Cambridge Analytica used personal data of users to influence them during the campaigning phase so that hey gave favorable votes to Trump.
 
Following a sharp drop in business, announcements of immediate shutting down of the business and applying for bankruptcy was made by Cambridge Analytica and its British parent SCL Elections Ltd earlier this month.
 
The legal petition by the company to file for bankruptcy was signed by daughters of billionaire Robert Mercer - Rebekah and Jennifer Mercer, on behalf of Cambridge Analytica’s board and was submitted at the U.S. Bankruptcy Court Southern District of New York.
 
One of Trump’s biggest donors was the Mercer family.
 
In the bankruptcy filing, the company claimed that it had assets worth in the range of $100,001 to $500,000 and the liabilities for the company was in the range of $1 million to $10 million.
 
According to a report by the New York Times, it was in 2013 that the company - Cambridge Analytica, was created and was based in London and had been formed with the initial explicit sim of working for the U.S. elections of 2016 in which Trump was a candidate. The report also claimed that the company had a $15 million backing from Mercer. The name of the company was reportedly given by Steve Bannon, the former Trump White House adviser, claimed the report in the New York Times.
 
With the revelation of the mishandling of private information of Facebook users , the ire of the authorities both in the U.S as well as in Europe had been directed to Facebook as well which has had to face multiple investigations in the two regions over questions raised about its policies and practices of ser\curing private and personal data of its users and that had significantly dented the share value of the company. 
 
Company founder and CEO Mark Zuckerberg has also had to appear before a U.S. congressional committee to answer questions about the business and safety issues of private data of users. he is also slated to meet European leaders and the European Parliament on the issue. 
 
(Source:www.reuters.com)






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