Cambridge Analytica Files for Bankruptcy After Misuse of Facebook Data
Cambridge Analytica also said the results of an independent investigation it had commissioned, which it released on Wednesday, contradicted assertions made by former employees and contractors about its acquisition of Facebook data.
The company, bankrolled by Robert Mercer, a wealthy Republican donor who invested at least $15 million, offered tools that it claimed could identify the personalities of American voters and influence their behavior. Those modeling techniques underpinned Cambridge Analytica’s work for the Trump campaign and for other candidates in 2014 and 2016.
But Cambridge Analytica came under scrutiny over the past year, first for its purported methods of profiling voters and then over allegations that it improperly harvested private data from Facebook users. Last year, the company was drawn into the special counsel investigation of Russian interference in the 2016 election.
The company was also forced to suspend its chief executive, Alexander Nix, after a British television channel released an undercover video. In it, Mr. Nix suggested that the company had used seduction and bribery to entrap politicians and influence foreign elections
Facebook has since announced changes to its policies for collecting and handling user data. Its chief executive, Mark Zuckerberg, testified last month before Congress, where he faced criticism for failing to protect users’ data.
The controversy dealt a major blow to Cambridge Analytica’s ambitions of expanding its commercial business in the United States, while also bringing unwanted attention to the American government contracts sought by SCL Group, an intelligence contractor.
In recent months, executives at Cambridge Analytica and SCL Group, along with the Mercer family, have moved to created a new firm, Emerdata, based in Britain, according to British records. The new company’s directors include Johnson Ko Chun Shun, a Hong Kong financier and business partner of Erik Prince. Mr. Prince founded the private security firm Blackwater, which was renamed Xe Services after Blackwater contractors were convicted of killing Iraqi civilians.
Cambridge and SCL officials privately raised the possibility that Emerdata could be used for a Blackwater-style rebranding of Cambridge Analytica and the SCL Group, according two people with knowledge of the companies, who asked for anonymity to describe confidential conversations. One plan under consideration was to sell off the combined company’s data and intellectual property.
An executive and a part owner of SCL Group, Nigel Oakes, has publicly described Emerdata as a way of rolling up the two companies under one new banner. Efforts to reach him by phone on Wednesday were unsuccessful.
A former Cambridge Analytica employee said that staff members were originally told there would be an all-hands meeting on Tuesday, but that it was pushed back a day. Then, after assembling at 9:30 a.m. Wednesday, they were kept waiting through the morning and much of the afternoon before Julian Wheatland, the company’s chief executive, delivered the news.
The damage to the company’s reputation was simply too severe, and it was “futile” and “pointless” to try to rebuild amid investigations in both the United States and Britain, Mr. Wheatland said, according to the former Cambridge Analytica employee. The former employee, who was informed by those in attendance, asked not to be identified because the person did not wish to be publicly associated with the firm.
Employees in Washington were told the news on a conference call later in the day. They were then told to turn over their identification cards and any company property they had and to go home. By 2 p.m., Cambridge Analytica offices on Pennsylvania Avenue were empty save for a single man, who refused to answer questions from a reporter.