After already being in a critical situation following the whistleblower accusations by former employee Frances Haugen, Facebook could now face an SEC (Securities and Exchange Commission) probe, on grounds of “misleading” the public and investors.
Probe Not Yet Confirmed
Haugen has filed at least eight separate complaints with the the SEC, accusing the social media giant of having fed misleading data to the public and investors, and even the Congress. While there exists a potential for a probe, SEC Chair Gary Gensler has not yet confirmed if the agency will actually take any actions based on her disclosures. At the same time, he has, during an interview to MSNBC, acknowledged that if a public company or its execs are found to be misleading the public, then the same can amount to “violation of securities laws.”
Haugen recently appeared on CBS’ talk show “60 Minutes” to shed light on her allegations, and this was followed by a testimony before Congress on Tuesday, where she provided document proofs to back her claims that Facebook was at least partly at fault for having added fuel to the Capitol riots that occurred on January 6 this year, following last year’s Presidential polls.
In her complaints, the ex-data scientist has also claimed that the social network misled investors and the general public regarding its efforts to tackle “violent extremism, hate speech, and human trafficking.” Also mentioned in her suits is how the company’s subsidiary platform Instagram can have a detrimental impact on the mental health of teens.
Haugen has also touched upon Facebook’s role in promoting hate speech and ethnic violence across the world. Another accusation claims that Facebook misled its advertising into thinking that its user base was growing, by inflating the shrinking numbers.
Senate Calling for Investigation
Senators at Congress have been urging the SEC’s regulators as well as their counterparts at the Federal Trade Commission to take appropriate measures to rein the company in. Senator Richard Blumenthal has said that if Haugen’s allegations are true, then Facebook should have to face “real penalties” for painting a deceptive and misleading “misrepresentation.”
Most of the time, when the SEC gets a complaint regarding a company, it has the choice of whether or not it should call for further investigation. If a new probe isn’t forced open, the complaint might still contribute to an ongoing probe and warrant an enforcement action.