Cambridge Analytica and its parent company Strategic Communications Laboratories (SCL) announced they are shutting down operations and filing bankruptcy, as Gizmodo reports. The company, which is at the center of the Facebook data scandal and connected to mining social-media profiles that may have been used to deliver targeted ads to likely Trump voters, announced the news on Wednesday.
"The Company is immediately ceasing all operations and the boards have applied to appoint solvency practitioners Crowe Clark Whitehill LLP to act as the independent administrator for Cambridge Analytica," the company said in a statement on its website. "Additionally, parallel bankruptcy proceedings will soon be commenced on behalf of Cambridge Analytica LLC and certain of the Company's U.S. affiliates in the United States Bankruptcy Court for the Southern District of New York."
As Gizmodo reports, SCL chairman Julian Wheatland announced the news earlier in the day during a conference call. Wheatland reportedly cited the ongoing investigations that resulted from the Facebook data scandal, harm to the company's reputation and client loss as contributing to the decision to close.
According to recent investigations by The New York Times and The Guardian, Donald Trump's presidential campaign hired Cambridge Analytica and SCL to harvest data from more than 50 million Facebook profiles to predict behavior of American voters. The data was allegedly taken without users' consent and used to target ads to likely Trump supporters. Shortly after the news broke, Facebook suspended Cambridge Analytica and SCL's accounts. Last month, Facebook CEO Mark Zuckerberg testified before the Senate to discuss the data breach, how data is collected and shared, targeted advertising and other user privacy concerns.
"Over the past several months, Cambridge Analytica has been the subject of numerous unfounded accusations and, despite the Company's efforts to correct the record, has 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," Cambridge Analytica's continued in its statement. The company said it conducted an independent investigation into the allegations from Queen's Counsel Julian Malins, whom they claim concluded that the allegations were not "borne out of the facts."
"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," the company further stated. "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."