Is this really the end of Cambridge Analytica?
Appointing administrators is usually the beginning of the end for any business, and last week, top 20 firm Crowe Clark Whitehill were appointed as administrator of Cambridge Analytica, the political consultancy at […]
Appointing administrators is usually the beginning of the end for any business, and last week, top 20 firm Crowe Clark Whitehill were appointed as administrator of Cambridge Analytica, the political consultancy at the heart of the Facebook data scandal.
Parent company SCL Elections Ltd filed insolvency proceedings for its subsidiary Cambridge Analytica, and Crowe Clark Whitehill partners Vince Green and Mark Newman were appointed joint administrators in the UK.
Parallel bankruptcy proceedings will be commenced in the United States Bankruptcy Court for the Southern District of New York.
So far, so so for a business going out of business. But given the controversy surrounding Cambridge Analytica’s data management and operations, are the troops simply disbanding and going their own way, or is something more sinister afoot?
What went wrong for Cambridge Analytica?
The company declared that virtually all of its customers and suppliers had been “driven away” thanks to the recent “unfounded accusations” and “siege of media coverage”, forcing them to cease operations.
Cambridge Analytica still denies any wrongdoing, however, claiming that they have been “vilified for activities that are not only legal, but also widely accepted as a standard component of online advertising in both the political and commercial arenas.”
To prove their point, Cambridge Analytica retained the services of Queen’s Counsel Julian Malins who conducted an independent review and reported that the allegations were not “borne out by the facts”. He added: “My findings entirely reflect the amazement of the staff, on watching the television programmes and reading the sensationalistic reporting, that any of these media outlets could have been talking about the company for which they worked. Nothing of what they heard or read resonated with what they actually did for a living.”
Cambridge Analytica affirmed its commitment to “fully meet its obligations to its employees, including with respect to notice periods, severance terms, and redundancy entitlements” despite its “precarious financial condition.”
What happens next?
Although the company said it has ceased operations with immediate effect, former Cambridge Analytica employee Christopher Wylie, who blew the whistle on the scandal, tweeted a warning that the firm may simply rebrand under a different name and retain many of the same staff.
Concerns have been raised over two London-registered operations, Firecrest Technologies Ltd and its parent, Emerdata Ltd., to which Cambridge Analytica may migrate their operations.
The BBC said it attempted to contact both operations, which are registered to PKF Littlejohn’s Canary Wharf office. A PKF Littlejohn representative told the BBC they were “not prepared to make any comment” on the matter.
In the meantime, data regulator the Information Commissioner’s Office said it 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.”
In spite of former employee Christopher Wylie’s warning, the founder of Cambridge Analytica’s parent company, SCL Group, Nigel Oakes confirmed to Bloomberg last week that the controversial data analytics firm would not be revived under a new name. But are the whispers about many of Cambridge Analytica’s executives simply moving across to another of SCL’s subsidiaries, Emerdata, true?
Oakes confirmed that Emerdata was also in administration, adding that “the whole lot is gone. There’s no secret. For anything like this to recreate itself you need a team of people to work together but nobody is working together. Everybody has gone off to do their own things.”
Oakes did not give any indication about what would happen to Cambridge Analytica’s voter profile data during the administration process – one of its greatest assets – but it’s possible it could be sold to the highest bidder, at least in the US. Despite insolvency proceedings, the firm will still have to contend with a ruling from Britain’s privacy watchdog ordering it to hand over the data it has on a U.S. resident in addition to investigations into the firm’s practices.
He also did not say if SCL Group, the parent company of Cambridge Analytica and SCL Elections, would be winding down as well.
So, while, in theory, the story of Cambridge Analytica’s wind down sounds like a fairly typical process for administrators, we can’t help but feel like there might be another chapter in there somewhere. Is there a phoenix about to rise from the ashes? Perhaps those of you who work in administration can provide more insight based on your experience!