Sen. Elizabeth Warren (D-MA) has forwarded correspondence to the Department of Justice (DOJ) and Securities and Exchange Commission (SEC) officials, seeking a Facebook investigation regarding potential wire fraud and securities violations.
Warren issued letters to United States Attorney General Merrick Garland and SEC Chairman Gary Gensler, citing public record documentation from whistleblower Frances Haugen suggesting Facebook may have misled investors, the SEC and advertising customers relating to the Potential Reach of advertising on the platform.
“At no point during the company’s alleged misrepresentations about Potential Reach — and their executives reported knowledge of the misrepresentations — did Facebook disclose the problems to their investors or the SEC,” Warren wrote. “This may have been a deliberate choice, suggesting that Facebook and its executives could have violated federal law. Facebook is not above the law. The company’s executives cannot mislead investors, the SEC, its advertising customers and the public about a core metric of its business model with impunity if such actions violate federal wire fraud or securities laws.”
Per Warren, Facebook’s advertisements were responsible for more than 97 percent of the company’s revenue — representing almost $29 billion.
“Given the allegations of such misconduct, I urge the DOJ and SEC to immediately commence investigations into Facebook’s representations with respect to Potential Reach and, if you find that the company has in fact violated wire fraud or securities laws, to pursue all available criminal and civil sanctions as appropriate,” Warren concluded.