The actual Facebook SEC whistleblower complaint summary given to Congress

And the newly released SumofUs Report regarding Instagram and just how harmful Instagram is for tweens, teenagers and young women. Exasperating body image issues and other self harm behaviors.

During the hours long Senate SubCommittee hearing - this is how the Chair ended the hearing. It is beyond powerful — it is heartbreaking that one of Senator Blumenthal’s constituent sent him a text message as the hearing occurred. The constituent is a father of a teenage daughter and you can physically feel the pain and heartbreak in the father’s text to Sen Blumenthal. If you watch any part of the hearing — this is one video I would recommend you watch. This father has perfectly summarized and encapsulated the real life harm Facebook has not just in our “general” society but what many parents of tween and teenage children are facing.

Not to carbon date myself but growing up I (like many of you) didn’t have social media to contend with. Given I spent most of my formative years in boarding school which strictly controlled my access to the news, TV programming and internet. Now our children are being harmed in their homes. And the weapon of choice is the smartphone/tablet and a social media giant like Facebook.

Similar to Senator Blumenthal —Senator Lee shows the content Facebook served up —specifically concerning young girls, teenage girls and young women —because it seemed like a natural fit —connecting the dots, if you will.

"You can declare moral bankruptcy, and we can figure out a fix [to] these things together because we solve problems together," Frances Haugen

And when the history books are written, I am certain history will be kind to Frances Haugen —she is incredibly brave and showed zero fear in calling attention to how Facebook’s algorithms keep serving up damaging content. The cyclical nature of Instagram and Facebook’s internal reports —which confirmed that tween and teenage girls are especially susceptible to body image issues and how Facebook/Instagram made these girls feel worse. Inexplicably these users also crave being on the platform. That is some next level psychological self harm torment that I’m not accredited to speak to with any level of expertise.

SumofUs Facebook/Instagram Report -

The advocacy group SumOfUs recently released a report and the findings are incredibly difficult to read…but I would recommend you take your time and read their report -Instagram and Facebook’s real world harm is especially significant to girls, teens and young women…

This research report, commissioned by SumOfUs, provides one such set of insights. Focusing specifically on content pushing eating disorders, extreme dieting, plastic surgery, and skin whitening, the analysis offers a snapshot of a toxic ecosystem that is acutely dangerous to young people and teenagers

Key Findings of the newly released Report:

Some of the data collected in the SumofUs Report - confirm what most of us have known, that tween and teenagers can struggle with body issues and if left untreated can result in bigger health issues, such as body dysmorphia, extreme dieting, worsening eating disorders, and protracted periods of self harm, such as cutting or burning. The Report also noted the following data which had an inescapable mitigating factor - COVID-19 and quarantines -meant more girls were using Instagram…

“…Facebook knows they are leading young users to anorexia content.."

Report and methodology used:

  • 22 different hashtags were identified that promote eating disorders on Instagram, potentially leading to over 45 million eating disorder related posts.

  • Of the 240 eating disorder posts analyzed by researchers commissioned by SumOfUs, 86.7% were pushing unapproved** appetite suppressants, and 52.9% posts directly promoted eating disorders.

  • 22 different hashtags were identified that promote plastic surgery on Instagram, potentially leading to over 22 million plastic surgery related posts.

  • Of the 240 plastic surgery posts analyzed by the researchers, 86.7% were using posts to promote plastic surgery procedures or clinics.

  • Of the 240 skin whitening posts analyzed by SumOfUs researchers, 81.3% promoted skin whitening products of which 83.1% were unapproved products

For contextual background

In the latter half of this article I provided you with links to the hearing, the Facebook Whistleblower Frances Haugen Written Testimony. You can also watch the Senate Subcommittee Hearing here - to be clear this is going to be an intensive crash course and I’ll do my best to break this up in three subsections:

  • Section I - SEC & Whistleblower Statutes and other considerations

  • Section II What happens once the SEC accepts a complaint

  • Section III - Frances Haugen SEC Whistleblower Complaints (eight in total)

File411’s Newsletter
Not a hacker. Not an outside threat actor. It was a BAD CONFIGURATION, per Facebook
It wasn’t a hack. It wasn’t a 3rd party intrusion. It was Facebook punching themselves in da nutz Like I said some of us knew that this would inevitably be the destination… yet trying to convey the actual facts, connecting the public facing dots and being drowned out by a cacophony of screaming goats —who repeatedly ignored the facts because they had som…
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Section I - SEC & Whistleblower Statutes and other considerations

In order to summarize and highlight the important aspects of Facebook Whistleblower Frances Haugen lodged with the SEC (again I would highly recommend you reread this article — I walked you through the SEC process, highlighted certain aspects of the Dodd-Frank Act) and you’ll need that background knowledge to understand the significance of her eight SEC complaints. Because again Facebook is a publicly traded company and pursuant to the Securities and Exchange Act (see SEC Resource Page)

This is actually incredibly important because I’m going to explain (in layman’s terms) the legalese of why these complaints are incredibly problematic for Facebook and for Congress –Can anyone point to any meaningful legislation for the 116th or 117th Congress specifically targeting Facebook? Because both the 116th & 117th have certainly held a lot of hearings, but as for any new or amended law -I’m coming up with an absolutely golden goose egg. My god did we learn nothing during the 2016 election? Apparently not. I’m done with hearings I want meaningful legislation that will effectuate real change for social media giants.

A true/real whistleblower, 1) immediately hires a firm that specializes in Whistleblower Complaints, because this is a very complex matter, 2) utilizes the Federal False Claims Act (FCA), 31 U.S.C. §§ 3729, et seq - and/or the Consumer Protection Act —below are a few quick bullet points:

  • The FCA has a key feature: a qui tam or more commonly known as the whistleblower provision, whereby an individual or entity (which known as a “relator”) may file suit

  • A whistleblower must voluntarily provide the SEC with original information 1 (documentation such as internal company communiques, various reports commissioned etc) -not to be redundant but the Dodd-Frank Act actually has provisions which make it unlawful for a company to prevent supplying this information to either Congress or the SEC, or both.

  • SEC with information about fraud or wrongdoing involving potential violations of the federal securities laws please follow the instructions provided in Rule 21F-9 and FAQ 9. A few examples of the kind of conduct and original information that interest the SEC (this is a very abbreviated list and it should not be construed as all inclusive);

    • Theft or misappropriation of funds or securities

    • Manipulation of a security's price or volume

    • Insider trading

    • Fraudulent or unregistered securities offering

    • False or misleading statements about a company (including false or misleading SEC reports or financial statements)

    • Bribery of, or improper payments to, corrupt foreign officials

    • Initial Coin Offerings and Cryptocurrencies 

Section II - What happens once the SEC accepts a complaint

When the SEC receives a tip, complaint and/or referrals —each are comprehensively reviewed by the SEC Enforcement staff.

  • During the evaluation process, the Office of Market Intelligence (which is part of the SEC’s enforcement division) the staff then examines each tip/complaint/referral, with the goal of identify those which are deemed “with high-quality information that warrant the additional allocation of SEC resources”

  • OMI then makes a determination that a complaint warrants deeper investigation

    • OMI staff assigns the complaint to one of the SEC’s eleven regional offices, a specialty unit, or to an Enforcement group in the Home Office.

    • Complaints that relate to an existing investigation are forwarded to the staff working on the matter.

    • Tips that could benefit from the specific expertise of another Division or Office within the SEC generally are forwarded to staff in that Division or Office for further analysis.

The SEC often uses the information provided from a whistleblower tips or complaints in a variety of ways. For example:

  • SEC may initiate an enforcement investigation based on the whistleblower’s tip.

  • A whistleblower tip may also prompt the SEC to commence an examination of a regulated entity or a review of securities filings, which may lead to an enforcement action.

  • if the tip does not cause an investigation to be opened, it may still help lead to a successful enforcement action if the whistleblower provides additional information that significantly contributes to an ongoing or active investigation.

The SEC conducts its investigations on a confidential basis as a matter of policy. The purpose of this policy is to protect the integrity of any investigation from premature disclosure and to protect the privacy of persons involved in our investigations. The SEC generally does not comment on whether it has opened an investigation in a particular matter or the status of its investigations.

Section III - Frances Haugen SEC Whistleblower Complaints (eight in total)

Getting my hands on the actual (and original) SEC complaint is beyond my current research skills - notwithstanding earlier today Ms Haugen’s attorney provided a summary of each complaint to Congress and someone who trust me sent me all eight PDFs — I believe they will be available via the Senate Subcommittee website - shortly but my friend trusted me even though they know I’m on the island and it’s probable that I’ve poured a margarita by 6PM 2

2020 General Election & Jan 6th

“Facebook misled investors and the public about its role perpetuating misinformation and violent extremism relating to the 2020 election and January 6th insurrection"

On pages 1 and 2 - you’ll note the whistleblower alleges that Zuckerberg lied (or flagrantly provided misleading testimony) to Congress. You’ll also note, providing misleading and incorrect information to current Stock Holders and Prospective Investors is really bad. If you’ll recall on Twitter I would routinely say if you are on the SEC’s radar “thoughts and prayers” because second to the FBI —the SEC Enforcement Division is not to be trifled with. Remember Facebook is STILL under their Twenty Year Consent Decree with the FTC - this link will take you to the FTC v Facebook consent decree.

…Facebook created test accounts one day to devolve towards recommending polarizing content…

The whistleblower cited (presumably attached to the formal filing) an internal Facebook study, which utilized the creation of new test accounts (created by & controlled by Facebook) which followed "verified/high quality conservative pages", such as: Fox News, Donald Trump, and Melania Trump, took one day to devolve towards recommending polarizing content.

"Page recommendations began to include conspiracy recommendations after only 2 days."

Facebook and Hate Speech and lack of enforcement

The general take away I noted is the numerous false and/or misleading statements various Facebook executives have made to their share holders, potential investors, Congress and to the public writ large. Those aren’t a casual slip of the tongue these are repeated dishonest and misleading statements.

“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."

"We're deleting less than 5% of all of the hate speech posted to Facebook. This is actually an optimistic estimate."

As a practical matter, Facebook’s actions have long been documented as; reactive, slow and minimal meaningful long term change. And while it’s not uncommon for a publicly traded company to present a public rosy picture for investors, but after reading all eight summaries of the whistleblower complaint it kind of made me chuckle. It reminded me of my many Twitter Threads where I was like “hmmm… those Facebook “active daily user” numbers —seem less than reliable and if they are misleading investors. Thoughts and Prayers. Misleading both Chambers of Congress. Oh. Dear I’m pretty sure prayers won’t help you.

At this point why would any one actually trust Facebook? I still do not understand how so many are voluntarily giving a massive data mining company so much of your personal information.

Worse yet - and I don’t know why this continues to be overlooked but I feel compelled to draw your attention to the words “Facebook experiment[s]” when testing algorithms and type of content the Whistleblower complaint repeatedly uses “Facebook experiment” in the context of mental health. And yes I know that some might be tired of my rattling on about CDA-230 and how social media giants like Facebook have contorted that law to essentially given themselves a blanket indemnification and absolute immunity.

As it relates to children -yesterday’s testimony:

“Facebook knows its engagement ranking on Instagram can lead children from very innocuous topics like healthy recipes [...] to anorexic content over a very short period of time," Haugen alleged.

I’ve uploaded all eight summaries of the Whistleblower complaint filed with the SEC to my Scribd Account or simply click on the following Scribd links:

And not to belabor this - but it’s long past time for Congress to enact;

  • Amending, voiding or even clarifying the protection giant social media companies have under the current language of CDA-230.

  • Taking a hard look at Facebook’s content monopoly.

  • Legislating better oversight and accountability

  • And yes a criminal referral for Zuckerberg’s and other senior Facebook testimony where they blatantly lied to Congress

Like many I’m tired of the endless hearings. If you compare Facebook’s Q1 2021 lobbying report you’ll note Facebook spent more than $4.79Million on lobbying for the 1st three months of 2021. Moreover in Q2 of 2021 Facebook spent another $4.77 on lobbying lawmakers in both chambers of Congress. Which is a significant uptick. Again nothing I’m publishing is hidden in a super secret database. This is all public information —provided you know where and what to look for, or not… for example

Senate —> https://lda.senate.gov/system/public/

House —> https://lobbyingdisclosure.house.gov

New Lobbyists Facebook Hired

535 GROUP, LLC —> 2021 Registration (met/lobbied Chief of Staff to Congressman Bud Cramer, Legislative Director to Congressman Bill Brewster) 2021 2nd Quarter LDA Report/Disclosure

—I’ll likely publish an additional follow up article in the coming days…so if interested I’d be on the look out…

-Filey

1

The SEC defines Original Information as:

…information derived from your independent knowledge (facts known to you that are not derived from publicly available sources) or independent analysis (evaluation of information that may be publicly available but which reveals information that is not generally known) that is not already known by us. So if we received your information previously from another person, that information will not be original information unless you were the original source of the information that the other person submitted. See Rule 21F-4(b)(1).

Some information is excluded from the definition of “original information” such as; information that is msubject to the attorney-client privilege or information learned because you held certain titles at a company (such as an officer or director) and you learned the information from another person or through the entity’s internal reporting systems.  See Rule 21F-4(b)(4).

In September 2020, the SEC adopted interpretive guidance on the meaning of “independent analysis.”  See Rule Amendment FAQ 5.
 

2

See Rule 21F-2. In addition, to be eligible for an award, the information must be provided in the form and manner required under the whistleblower rules.  See Rule 21F-9 and FAQ 9.