Cambridge Analytica starts insolvency proceedings

May 03, 2018

Written By Becky Kells, Editor, AllAboutLaw

Cambridge Analytica, the firm currently under investigation for its alleged misuse of data from millions of Facebook users, announced yesterday that it has started insolvency proceedings in the UK and the US, and will cease operations immediately.

The announcement comes after a turbulent few months for the data firm, after its major role in a data mining scandal involving Facebook was made public knowledge by an exposé published by the Observer.

Cambridge Analytica is accused of mining and storing the data of 87 million Facebook users, and using it in a political context in the run-up to the 2016 US Presidential Election and the EU Referendum in the UK.

Since then, the firm has been steadily losing clients as its reputation plummeted. An investigation into the firm’s conduct resulted in its UK offices being searched, as the Guardian’s whistleblower, Christopher Wylie, released a series of incriminating allegations about its conduct.

In response, Cambridge Analytica retained Julian Malins QC, who conducted an independent investigation into the political activities of CA. He concluded that the media allegations about CA were “not borne out by the facts”.

In a statement on its website, Cambridge Analytica said: “Despite Cambridge Analytica’s unwavering confidence that its employees have acted ethically and lawfully, which view is now fully supported by Mr. Malins’ report, 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.”

However, those investigating the firm remain devoted to the cause, saying that the company’s insolvency will not stop them from seeking answers from individuals and directors. A spokesperson from ICO - which is investigating the activity of Cambridge Analytica - said:

"The ICO will continue its civil and criminal investigations and will seek to pursue individuals and directors, as appropriate and necessary even where companies may no longer be operating. We will also monitor closely any successor companies using our powers to audit and inspect, to ensure the public is safeguarded."

It is a scandal which has also seen Facebook placed in an incriminating spotlight: it allegedly knew about this breach long before it became public knowledge, and failed to inform those affected until very recently. Mark Zuckerberg, founder and CEO of Facebook, was called to appear before Congress to be questioned about the data breach. Zuckerberg sent a representative to undergo similar questioning by the British parliament, which was deemed unsatisfying; he will now be issued with formal summons should he continue to refuse to testify in person.

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