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SEC charges App Annie and its founder with securities fraud

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Re: SEC charges App Annie and its founder with securities fraud

#21

Post by wyager »

detaro wrote: post #13
lifeisstillgood wrote: post #8

So (getting my head round this) ... mobile app creators added an App Annie agent to their apps, which downloaded performance / usage data on their app to central servers. And App Annie promised not to sell that data to third parties unless it was "aggregated and anonymised". (Does App Annie pay the app creators for this?) App Annie sells this so people can work out which app to advertise on (the one with all the usag…

If Apple were to publish it, it wouldn't be confidential insider information. But they don't, so it is, so misusing it is a problem.

In this case, the issue would not be that the information is private, but that App Annie had a contractual fiduciary obligation to its customers which it violated.

Re: SEC charges App Annie and its founder with securities fraud

#22

Post by ajsharp »

vmception wrote: post #15
ajsharp wrote: post #10

Earlier quoted context omitted.

I assume DOJ can't prosecute when SEC comes to a settlement agreement?

That's not a good assumption. Parallel enforcement routinely happens. Sometimes simultaneously, sometimes later. Sometimes both are reported in the same places, other times one is not reported at all except on DOJ's own website or in more obscure court dockets. Sometimes there is no referral. Sometimes the DOJ passes on it.

So if that's the case, what is the incentive to settle for the company? Or can the SEC just arbitrarily levy fees?

Re: SEC charges App Annie and its founder with securities fraud

#23

Post by usmannk »

lifeisstillgood wrote: post #8

So (getting my head round this) ... mobile app creators added an App Annie agent to their apps, which downloaded performance / usage data on their app to central servers. And App Annie promised not to sell that data to third parties unless it was "aggregated and anonymised". (Does App Annie pay the app creators for this?) App Annie sells this so people can work out which app to advertise on (the one with all the usag…

It sounds to me like the contracts did not contradict.

> [App Annie] went to great lengths to assure [Trading Firms] that the financial and app-related data [App Annie] sold was the product of a sophisticated statistical model and that [App Annie] had controls to ensure compliance with the federal securities laws. These representations were materially false and misleading

It's illegal because App Annie was feeding trading firms insider information while swearing it was actually just a really good statistical model. Presumably the actual model wasn't good enough, so they started using unaggregated data to eke out perf.

What they did is not just breach of contract, but insider trading as they fed private information to trading firms.

> the order finds that from late 2014 through mid-2018, App Annie used non-aggregated and non-anonymized data to alter its model-generated estimates to make them more valuable to sell to trading firms.

Re: SEC charges App Annie and its founder with securities fraud

#24

Post by [deleted] »

ajsharp wrote: post #22
vmception wrote: post #15

Earlier quoted context omitted.

That's not a good assumption. Parallel enforcement routinely happens. Sometimes simultaneously, sometimes later. Sometimes both are reported in the same places, other times one is not reported at all except on DOJ's own website or in more obscure court dockets. Sometimes there is no referral. Sometimes the DOJ passes on it.

So if that's the case, what is the incentive to settle for the company? Or can the SEC just arbitrarily levy fees?

[deleted]

Re: SEC charges App Annie and its founder with securities fraud

#25

Post by etskinner »

tcldr wrote: post #16
usmannk wrote: post #6

What I don't get is where does App Annie get its data? Implied here is that app developers hand it over, but what do they get in return? And is that the primary source of App Annie's data?

Yes, in most cases they hand it over for free in return for analysis tools for viewing their own data.(Charts, filters, etc.) This was a pretty big benefit when all Apple offered was an unwieldy CSV broken out into line items for each country, but less so today.

So that makes me think: Given how ubiquitous Google's analytics service is, they could conceivably pull the same fast one, just substitute 'app' for 'website'. And the SEC is essentially saying "we'll probably only fine you a fraction of the money you made on this".

Re: SEC charges App Annie and its founder with securities fraud

#26

Post by tych0 »

ajsharp wrote: post #22
vmception wrote: post #15

Earlier quoted context omitted.

That's not a good assumption. Parallel enforcement routinely happens. Sometimes simultaneously, sometimes later. Sometimes both are reported in the same places, other times one is not reported at all except on DOJ's own website or in more obscure court dockets. Sometimes there is no referral. Sometimes the DOJ passes on it.

So if that's the case, what is the incentive to settle for the company? Or can the SEC just arbitrarily levy fees?

Companies/directors can (and do, see e.g. Theranos/Elizabeth Holmes) settle without admitting fault.

Presumably the goal is to lower the number of three letter agencies investigating you.

Re: SEC charges App Annie and its founder with securities fraud

#27

Post by soheil »

My first thought was “there are publicly traded companies that use an app to monitor their app performance instead of relying on data directly from Apple?!”

Surely giving access to your app’s data to a random company is not without risks and is kind of irresponsible specially more so if you’re a public company having fiduciary duties to your investors.

Re: SEC charges App Annie and its founder with securities fraud

#28

Post by belltaco »

ajsharp wrote: post #22
vmception wrote: post #15

Earlier quoted context omitted.

That's not a good assumption. Parallel enforcement routinely happens. Sometimes simultaneously, sometimes later. Sometimes both are reported in the same places, other times one is not reported at all except on DOJ's own website or in more obscure court dockets. Sometimes there is no referral. Sometimes the DOJ passes on it.

So if that's the case, what is the incentive to settle for the company? Or can the SEC just arbitrarily levy fees?

Several reasons.Just the lawyer fees to fight the SEC lawyers will be a lot. What they did could be worse than what the SEC found so far. Discovery process may be painful and lead to emails and documents to be published on the web. It will be a big distraction for the top brass.

Re: SEC charges App Annie and its founder with securities fraud

#29

Post by m_ke »

gh123man wrote: post #20

Not directly related but when I was releasing an iOS app recently - App Annie made me realize how "pay to win" building apps is these days. You know a service is expensive when there is only a "contact sales" button on the homepage. It's impossible for an indie dev to afford the data they provide, and gives a massive SEO/keyword ranking edge to the larger companies that pay for the subscription.

When we were launching our app 5 years ago all of the App Store optimization experts told us the only way to get discovered was to spend a few 100K on advertising or downloads on launch day to show up on the top 100 chart.

Re: SEC charges App Annie and its founder with securities fraud

#30

Post by 1vuio0pswjnm7 »

Curios: Searches of Wikipedia for "app annie" return hundreds of Wikipedia pages, but there is no page for App Annie itself.

https://en.wikipedia.org/w/index.php?limit=500&profile=all&n...

https://en.wikipedia.org/w/index.php?search=App+Annie&title=...

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