The Wall Street Journal: SEC investigating if Facebook properly warned investors of improper data-sharing

Securities regulators are investigating whether Facebook Inc. adequately warned investors that developers and other third parties may have obtained users’ data without their permission or in violation of Facebook’s policies, people familiar with the matter said.

The Securities and Exchange Commission’s probe of the social-media company, first reported in early July, follows revelations that Cambridge Analytica, a data-analytics firm that had ties to President Donald Trump’s 2016 campaign, got access to information on millions of Facebook users.

The SEC has requested information from Facebook FB, +2.16%   seeking to understand how much the company knew about Cambridge Analytica’s use of the data, these people said. The agency also wants to know how the company analyzed the risk it faced from developers sharing data with others in violation of Facebook’s policies, they added.

The SEC enforces securities laws that govern what must be disclosed to shareholders so they can make informed investment decisions. It is one of several government agencies investigating Facebook and its handling of user data.

An expanded version of this report appears on WSJ.com.

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