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Floyd Mayweather and DJ Khaled to pay SEC fines for flogging garbage ICOs

Floyd Mayweather Jr. and DJ Khaled have agreed to “pay disgorgement, penalties and interest” for failing to disclose promotional payments from three ICOs including Centra Tech. Mayweather received $100,000 from Centra Tech while Khaled got $50,000 from the failed ICO. The SEC cited Khaled and Mayweather’s social media feeds, noting they touted securities for pay without disclosing their affiliation with the companies.

Mayweather, you’ll recall, appeared on Instagram with a whole lot of cash while Khaled called Centra Tech a “Game changer.”

“You can call me Floyd Crypto Mayweather from now on,” wrote Mayweather. Sadly, the SEC ruled he is no longer allowed to use the nom de guerre “Crypto” anymore.

Without admitting or denying the findings, Mayweather and Khaled agreed to pay disgorgement, penalties and interest. Mayweather agreed to pay $300,000 in disgorgement, a $300,000 penalty, and $14,775 in prejudgment interest. Khaled agreed to pay $50,000 in disgorgement, a $100,000 penalty, and $2,725 in prejudgment interest. In addition, Mayweather agreed not to promote any securities, digital or otherwise, for three years, and Khaled agreed to a similar ban for two years. Mayweather also agreed to continue to cooperate with the investigation.

“These cases highlight the importance of full disclosure to investors,” said Stephanie Avakian of the SEC. “With no disclosure about the payments, Mayweather and Khaled’s ICO promotions may have appeared to be unbiased, rather than paid endorsements.”

The SEC indicted Centra Tech’s founders, Raymond Trapani, Sohrab Sharma, and Robert Farkas, for fraud.

“The problem is Facebook,” lawmakers from nine countries tell Zuckerberg’s accountability stand-in

A grand committee of international parliamentarians empty-chaired Mark Zuckerberg at a hearing earlier today, after the Facebook founder snubbed repeat invitations to face questions about malicious, abusive and improper uses of his social media platform — including the democracy-denting impacts of so-called ‘fake news’.

The UK’s DCMS committee has been leading the charge to hold Facebook to account for data misuse scandals and election interference — now joined in the effort by international lawmakers from around the world. But still not by Zuckerberg himself.

In all parliamentarians from nine countries were in the room to put awkward questions to Zuckerberg’s stand in, policy VP Richard Allan — including asking what Facebook is doing to stop WhatsApp being used as a vector to spread political disinformation in South America; why Facebook refused to remove a piece of highly inflammatory anti-Muslim hate speech in Sri Lanka until the country blocked access to its platform; how Facebook continues to track non-users in Belgium and how it justifies doing so under Europe’s tough new GDPR framework; and, more generally, why anyone should have any trust in anything the company says at this point — with company neck-deep in privacy and trust scandals.

The elected representatives were collectively speaking up for close to 450 million people across the UK, Argentina, Belgium, Brazil, Canada, France, Ireland, Latvia and Singapore. The most oft repeated question on their lips was why wasn’t Zuckerberg there?

Allan looked uncomfortable on his absentee boss’ behalf and spent the best part of three hours running the gamut of placative hand gestures as he talked about wanting to work with regulators to find “the right regulation” to rein in social media’s antisocial, anti-democratic impacts.

Canadian MP Bob Zimmer spoke for the room, cutting into another bit of Allan’s defensive pablum with: “Here we are again hearing another apology from Facebook — ‘look trust us, y’all regulate us etc but we really don’t have that much influence in the global scheme of things’. In this room we regulate over 400M people and to not have your CEO sit in that chair there is an offence to all of us in this room and really our citizens as well.”

“[Blackberry co-founder] Jim Balsille said, when I asked him on our committee, is our democracy at risk if we don’t change the laws in Canada to deal with surveillance capitalism?” Zimmer continued. “He said without a doubt. What do you think?” — which Allan took as a cue to ummm his way into another series of “we need tos”, and talk of “a number of problematic vectors” Facebook is trying to address with a number of “tools”.

The session was largely filled up such frustratingly reframed waffle, as Allan sought to deflect, defang and defuse the committee’s questions — leading it to accuse him more than once of repeating the ‘delay, deny, deflect’ tactics recently reported on by the New York Times.

Allan claimed not — claiming to be there “acknowledging” problems. But that empty chair beside him sure looked awkward.

At the close, Canada’s Charlie Angus sought to sweep Facebook’s hot air away by accusing Allan of distracting with symptoms — to draw the regulatory eye away from the root cause of the problem which he sharply defined as Facebook itself.

“The problem we have with Facebook is there’s never accountability — so I would put it to you when we talk about regulation that perhaps the best regulation would be antitrust,” he said. “Because people who don’t like Facebook — oh they could go to WhatsApp . But oh we have some problems in South America, we have problems in Africa, we have to go back to Mr Zuckerberg who’s not here.

“My daughters could get off Facebook. But they’d go to Instagram . But that’s now controlled by Facebook. Perhaps the simplest form of regulation would be to break Facebook up — or treat it as a utility so that we could all then feel that when we talk about regulation we’re talking about allowing competition, counting metrics that are actually honest and true, and that Facebook has broken so much trust to allow you to simply gobble up every form of competition is probably not in the public interest.

“So when we’re talking about regulation would you be interested in asking your friend Mr Zuckerberg if we could have a discussion about antitrust?”

Allan’s reached for an “it depends upon the problem we’re trying to solve” reply.

“The problem is Facebook,” retorted Angus. “We’re talking about symptoms but the problem is the unprecedented economic control of every form of social discourse and communication. That it’s Facebook. That that is the problem that we need to address.”

Committee chair Damian Collins also gave short shrift to Allan’s attempt to muddily reframe this line of questioning — as regulators advocating “turning off the Internet” (instead of what Angus was actually advocating: A way to get “credible democratic responses from a corporation”) — by interjecting: “I think we would also distinguish between the Internet and Facebook to say they’re not necessarily the same thing.”

The room affirmed its accord with that.

At the start of the session Collins revealed the committee would not — at least for now — be publishing the cache of documents it dramatically seized this weekend from the founder of a startup that’s been suing Facebook since 2015, saying it was “not in a position to do that”.

Although at several points during the session DCMS committee members appeared to tease some new details derived from these documents, asking for example whether Facebook had ever made API decisions for developers contingent on them taking advertising on its platform.

Allan said it had not — and appeared to be attempting to suggest that the emails the committee might have been reading were the result of ‘normal’ internal business discussions about how to evolve Facebook’s original desktop-based business model for the mobile-first era.

Collins did detail one piece of new information that he categorically identified as having been sourced from the seized documents — and specifically from an internal email sent by a Facebook engineer, dating from October 2014 — describing this to be of significant public interest.

“An engineer at Facebook notified the company in October 2014 that entities with Russian IP addresses had been using a Pinterest API key to pull over 3BN data points a day through the ordered friends API,” he revealed, asking Allan whether “that reported to any external body at the time”.

The Facebook VP responded by characterizing the information contained in the seized documents as “partial”, on account of being sourced via a “hostile litigant”.

“I don’t want you to use this opportunity just to attack the litigant,” retorted Collins. “I want you to address the question… what internal process [Facebook] ran when this was reported to the company by an engineer? And did they notify external agencies of this activity? Because if Russian IP addresses were pulling down a huge amount of data from the platform — was that reported or was that just kept, as so often seems to be the case, just kept within the family and not talked about.”

“Any information you have seen that’s contained within that cache of emails is at best partial and at worst potentially misleading,” responded Allan.

“On the specific question of whether or not we believe, based on our subsequent investigations, that there was activity by Russians at that time I will come back to you.”

We reached out to Pinterest to ask whether Facebook ever informed it about such an abuse of its API key. At the time of writing it had not responded to our request for comment.

‘Frat boy billionaire’ Mark Zuckerberg shamed by international lawmakers for not attending hearing

Lawmakers from nine different countries openly mocked Facebook CEO Mark Zuckerberg for not attending a hearing in the UK. 

On Tuesday, two dozen lawmakers from nine international parliaments convened in London for the inaugural “International Grand Committee on Disinformation.” The intended purpose of the event was to grill Facebook founder Mark Zuckerberg over the company’s scandals involving fake news. While representatives from Argentina, Belgium, Brazil, Canada, France, Ireland, Latvia, Singapore, and the UK were in attendance, one individual was glaringly absent: Mark Zuckerberg.

The Facebook founder and CEO was repeatedly asked to attend by the committee. The social media company sent its Vice President of Public Policy for Europe, the Middle East and Africa, Richard Allan, in Zuckerberg’s place. 

Allan was seated next to an empty chair designated for his boss for the entirety of the event. Facebook’s policy chief apologized to the committee for Zuckerberg’s absence. The Facebook founder’s decision to skip the hearing did not sit well with lawmakers.

“We’ve never seen anything quite like Facebook, where while we were playing on our phones and apps, our democratic institutions … seem to have been upended by frat boy billionaires from California,” said Charlie Angus, a representative from Canada. 

At the committee meeting, one British lawmaker, Damian Collins, unveiled a new piece of information regarding unusual Russia-linked activity on Facebook. According to internal company documents, a Facebook engineer warned the social media giant of a data issue involving Russia in 2014 — earlier than Facebook has previously publicly admitted. 

“An engineer at Facebook notified the company in October 2014 that entities with Russian IP addresses had been using a Pinterest API key to pull over three billion data points a day through the Ordered Friends API,” said Collins.

Collins, who heads the British parliamentary committee on disinformation, made headlines this past weekend when he invoked a “rare parliamentary mechanism” in order to obtain internal Facebook.

The British lawmaker has yet to release the internal Facebook documents, but claims he has full power to do so. The same documents are currently under a court seal in the U.S.

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Weird Facebook bug sees old chat messages pop up for users

Facebook has a weird bug where old Messenger chats resurface.
Facebook has a weird bug where old Messenger chats resurface.

Image: Richard Atrero de Guzman/NurPhoto via Getty Images

A strange Facebook problem has seen users confronted with the past.

People have reported a weird bug where old chat messages, some from years ago, are popping up again through Messenger’s tabs. 

The issue is particularly troubling for certain users who have seen from messages from loved ones who have passed away, or from people they haven’t spoken to in a long time.

A Facebook spokesperson told Mashable the company had fixed the issue in a statement:

“Earlier today, some people may have experienced Facebook resending older messages,” it read. “The issue, caused by software updates, has been fully resolved. We’re sorry for any inconvenience.”

It’s not the first time Facebook has dredged up memories we’d prefer to forget. 

When the platform launched On This Day last year, the feature was criticised for bringing up old photos and posts that might be painful or otherwise unwelcome. Facebook later introduced the ability to edit posts and control what memories you see.

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UK parliament seizes cache of internal Facebook documents to further privacy probe

Facebook founder Mark Zuckerberg may yet regret underestimating a UK parliamentary committee that’s been investigating the democracy-denting impact of online disinformation for the best part of this year — and whose repeat requests for facetime he’s just as repeatedly snubbed.

In the latest high gear change, reported in yesterday’s Observer, the committee has used parliamentary powers to seize a cache of documents pertaining to a US lawsuit to further its attempt to hold Facebook to account for misuse of user data.

Facebook’s oversight — or rather lack of it — where user data is concerned has been a major focus for the committee, as its enquiry into disinformation and data misuse has unfolded and scaled over the course of this year, ballooning in scope and visibility since the Cambridge Analytica story blew up into a global scandal this April.

The internal documents now in the committee’s possession are alleged to contain significant revelations about decisions made by Facebook senior management vis-a-vis data and privacy controls — including confidential emails between senior executives and correspondence with Zuckerberg himself.

This has been a key line of enquiry for parliamentarians. And an equally frustrating one — with committee members accusing Facebook of being deliberately misleading and concealing key details from it.

The seized files pertain to a US lawsuit that predates mainstream publicity around political misuse of Facebook data, with the suit filed in 2015, by a US startup called Six4Three, after Facebook removed developer access to friend data.

The core complaint is an allegation that Facebook enticed developers to create apps for its platform by implying they would get long-term access to user data in return. So by later cutting data access the claim is that Facebook was effectively defrauding developers.

Since lodging the complaint, the plaintiffs have seized on the Cambridge Analytica saga to try to bolster their case.

And in a legal motion filed in May Six4Three’s lawyers claimed evidence they had uncovered demonstrated that “the Cambridge Analytica scandal was not the result of mere negligence on Facebook’s part but was rather the direct consequence of the malicious and fraudulent scheme Zuckerberg designed in 2012 to cover up his failure to anticipate the world’s transition to smartphones”.

The startup used legal powers to obtain the cache of documents — which remain under seal on order of a California court. But the UK parliament used its own powers to swoop in and seize the files from the founder of Six4Three during a business trip to London when he came under the jurisdiction of UK law, compelling him to hand them over.

According to the Observer, parliament sent a serjeant at arms to the founder’s hotel — giving him a final warning and a two-hour deadline to comply with its order.

“When the software firm founder failed to do so, it’s understood he was escorted to parliament. He was told he risked fines and even imprisonment if he didn’t hand over the documents,” it adds, apparently revealing how Facebook lost control over some more data (albeit, its own this time).

In comments to the newspaper yesterday, DCMS committee chair Damian Collins said: “We are in uncharted territory. This is an unprecedented move but it’s an unprecedented situation. We’ve failed to get answers from Facebook and we believe the documents contain information of very high public interest.”

Collins later tweeted the Observer’s report on the seizure, teasing “more next week” — likely a reference to the grand committee hearing in parliament already scheduled for November 27.

But it could also be a hint the committee intends to reveal and/or make use of information locked up in the documents, as it puts questions to Facebook’s VP of policy solutions…

That said, the documents are subject to the Californian superior court’s seal order, so — as the Observer points out — cannot be shared or made public without risk of being found in contempt of court.

A spokesperson for Facebook made the same point, telling the newspaper: “The materials obtained by the DCMS committee are subject to a protective order of the San Mateo Superior Court restricting their disclosure. We have asked the DCMS committee to refrain from reviewing them and to return them to counsel or to Facebook. We have no further comment.”

Facebook’s spokesperson added that Six4Three’s “claims have no merit”, further asserting: “We will continue to defend ourselves vigorously.”

And, well, the irony of Facebook asking for its data to remain private also shouldn’t be lost on anyone at this point…

Another irony: In July, the Guardian reported that as part of Facebook’s defence against Six4Three’s suit the company had argued in court that it is a publisher — seeking to have what it couched as ‘editorial decisions’ about data access protected by the US’ first amendment.

Which is — to put it mildly — quite the contradiction, given Facebook’s long-standing public characterization of its business as just a distribution platform, never a media company.

So expect plenty of fireworks at next week’s public hearing as parliamentarians once again question Facebook over its various contradictory claims.

It’s also possible the committee will have been sent an internal email distribution list by then, detailing who at Facebook knew about the Cambridge Analytica breach in the earliest instance.

This list was obtained by the UK’s data watchdog, over the course of its own investigation into the data misuse saga. And earlier this month information commissioner Elizabeth Denham confirmed the ICO has the list and said it would pass it to the committee.

The accountability net does look to be closing in on Facebook.

Even as Facebook continues to deny international parliaments any face-time with its founder and CEO (the EU parliament remains the sole exception).

Last week the company refused to even have Zuckerberg do a video call to take the committee’s questions — offering its VP of policy solutions, Richard Allan, to go before what’s now a grand committee comprised of representatives from seven international parliaments instead.

The grand committee hearing will take place in London on Tuesday morning, British time — followed by a press conference in which parliamentarians representing Facebook users from across the world will sign a set of ‘International Principles for the Law Governing the Internet’, making “a declaration on future action”.

So it’s also ‘watch this space’ where international social media regulation is concerned.

As noted above, Allan is just the latest stand-in for Zuckerberg. Back in April the DCMS committee spend the best part of five hours trying to extract answers from Facebook CTO, Mike Schroepfer.

“You are doing your best but the buck doesn’t stop with you does it? Where does the buck stop?” one committee member asked him then.

“It stops with Mark,” replied Schroepfer.

But Zuckerberg definitely won’t be stopping by on Tuesday.