Facebook Whistleblower Frances Haugen Releases Her 8 Damning SEC Complaints

Complaints Facebook whistleblower Frances Haugen filed to the Securities and Exchange Commission (SEC) accuses the corporate of mendacity to the company, buyers, journalists, and Congress.

Before leaving the corporate in May 2021, Haugen, a former Facebook product supervisor for civil misinformation, made positive to take hundreds of inner paperwork along with her. She later grew to become the supply for a damning Wall Street Journal series detailing every little thing from how Facebook downplayed inner analysis displaying the psychological hurt Instagram causes for some younger girls to turning a blind eye to reports of human trafficking and a secret “XCheck” program exempting sure customers from its guidelines. Haugen unveiled her identity in a prolonged interview on 60 Minutes on Sunday, with the community now reporting she has filed at the very least eight separate complaints with the SEC.

At the core of the complaints, first reported by CBS’s 60 Minutes, Haugen’s attorneys wrote, is the declare that in public statements Facebook misrepresented the dimensions and its consciousness of extreme issues with Facebook merchandise to buyers so wantonly that it violated securities legal guidelines. Facebook is a public firm, and the complaints argue the extent of the lies and omissions in its company SEC filings additionally went properly past what’s authorized. Haugen’s filings with the SEC state:

Our nameless consumer is disclosing unique proof displaying that Facebook, Inc. (NASDAQ: FB) has, for years previous and ongoing, violated U.S. securities legal guidelines by making materials misrepresentations and omissions in statements to buyers and potential buyers, together with, inter alia, by filings with the SEC, testimony to Congress, on-line statements and media tales.

Specific examples cited within the filings embrace claims that Facebook and its subsidiary Instagram knew, as of 2019, that their merchandise have been used “promote human trafficking and domestic servitude.” The paperwork supplied to the Wall Street Journal confirmed that Facebook solely took motion when the issue grew so vital that Apple threatened to take away its apps from the App Store.

“Our investigative findings demonstrate that … our platform enables all three stages of the human exploitation lifecycle (recruitment, facilitation, exploitation) via complex real-world networks,” an inner Facebook doc cited within the submitting concluded.

The SEC filings additionally state that Facebook “failed to deploy internally-recommended or lasting counter-measures” in opposition to voter fraud conspiracy theories and violent rhetoric that circulated in the course of the 2020 elections and earlier than Donald Trump supporters stormed the Capitol on Jan. 6 in an effort to overturn the outcomes.

One criticism, titled, “Facebook misled investors and the public about its role perpetuating misinformation and violent extremism relating to the 2020 election and January 6th insurrection,” argues that Facebook analysis made it properly conscious its suggestions algorithm “can veer people interested in conservative topics into radical or polarizing ideas and groups/pages.” Specifically, it cites a research that discovered that new customers who adopted “verified/high quality conservative pages” like Donald Trump or Fox News noticed their suggestions “include conspiracy recommendations after only 2 days.”

Haugen’s attorneys wrote to the SEC that Facebook CEO Mark Zuckerberg misled buyers in 2018 by saying that Facebook would now emphasize “meaningful social interactions” (MSI) over engagement. One of the inner paperwork states that the MSI strategy made misinformation and hate speech worse, as “the more negative comments a piece of content instigates, the higher likelihood for the link to get more traffic.” Another submitting, claiming the corporate lied about its dealing with of hate speech, refers to an inner Facebook research that concluded, “We only take action against approximately 2% of the hate speech on the platform. Recent estimates suggest that unless there is a major change in strategy, it will be very difficult to improve this beyond 10-20% in the short-medium term.”

Another doc supplied by Haugen states, “We’re deleting less than 5% of all of the hate speech posted to Facebook. This is actually an optimistic estimate.”

One of the filings accuses Facebook CEO Mark Zuckerberg of mendacity to Congress about Instagram’s impression on younger ladies in March 2020; whereas Zuckerberg advised Congress he didn’t imagine that it damage them, the corporate had already performed inner analysis concluding, “We make body image issues worse for 1 in 3 teen girls.” (Facebook later downplayed this discovering, claiming it solely utilized to a subset of respondents who “were experiencing body image issues.” The firm has solely selectively launched its inner analysis.)

Finally, different filings accuse Facebook and its executives of issuing deceptive statements about its equal enforcement of the foundations regardless of the existence of the XCheck program, of pretending it takes world motion in opposition to ethnic violence regardless of figuring out it was hobbled by an absence of language expertise and native employees, and presenting cooked books about person demographics to advertisers and buyers.

Facebook responded to 60 Minutes (or beforehand commented to the Journal) denying or contesting every of the claims raised by Haugen. In a consultant assertion t0 CBS on the hate speech situation, Facebook’s director of coverage communications, Lena Pietsch, successfully argued the corporate did one of the best it might:

We’ve invested closely in folks and know-how to maintain our platform secure, and have made preventing misinformation and offering authoritative data a precedence. If any analysis had recognized an actual answer to those advanced challenges, the tech business, governments, and society would have solved them a very long time in the past. We have a powerful observe document of utilizing our analysis—in addition to exterior analysis and shut collaboration with consultants and organizations—to tell modifications to our apps.

On Tuesday, Haugen testified earlier than a Senate Commerce subcommittee concerning Facebook’s practices.

“The reality is that we’ve seen from repeated documents within my disclosures, is that Facebook’s AI systems only catch a very tiny minority of offending content,” Haugen advised lawmakers on Tuesday. “And best case scenario, and the case of something like hate speech, at most they will ever get 10 to 20 percent. In the case of children, that means drug paraphernalia ads like that, it’s likely if they rely on computers and not humans, they will also likely never get more than 10 to 20 percent of those ads.”

In one other trade with legislators, Haugen described a cyclic “pattern of behavior” by which “problems were so understaffed that there was kind of an implicit discouragement from having better detection systems.”

“My last team at Facebook was on the counterespionage team within the threat intelligence org, and at any given time, our team could only handle a third of the cases that we knew about,” Haugen advised the senators. “We knew that if we built even a basic detecter, we would likely have many more cases.”

Facebook suffered a significant outage that affected each its essential web site and all its subsidiaries, Instagram and WhatsApp, for many of the work day on Monday. The firm has additionally seen double-digit inventory losses over the previous few weeks, although it has shrugged off related downturns up to now and sat at almost $334 on early Tuesday afternoon, up from round $264 a yr in the past.

The SEC advised 60 Minutes it “does not comment on the existence or nonexistence of a possible investigation.”

Haugen’s complaints to the SEC can be found for obtain right here: 1, 2, 3, 4, 5, 6, 7, 8.