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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

#31

Post by hermitdev »

tych0 wrote: post #26
ajsharp wrote: post #22

Earlier quoted context omitted.

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.

Well, at least in the case of Holmes, her legal troubles are not over. I'm not familiar with the details, but among the charges are defrauding investors. The trial just started on Sep 8th.

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

#32

Post by anm89 »

Closi wrote: post #5

So you can deliberately disclose confidential information for the explicit purpose of helping others to ‘unknowingly’ insider trade for 4 years… and the punishment is only to pay less than a month of revenue three years later? Wow.

total insanity.

it always makes me think, people get excited about these complicated political schemes to deal with wealth inequality, but I don't see a 10th of that level of excitement to just stop people from being handed 100 million dollar government privileges like this one in the first place

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

#33

Post by lifeisstillgood »

usmannk wrote: post #23
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 tr…

Oh I see yes.

But I still read it as similar as going to a bank and saying can you supply me a list of people with over a million dollars and the bank says "we used our aggregated knowledge of our customers to create a statistical model of which of our customers has over a million. Plug your parameters in here and see what pops out"

It's a struggle to think this was ever anything but a nod and a wink.

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

#34

Post by lifeisstillgood »

tcldr wrote: post #19
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’s the app’s financial data. Not usage data. App developers would keenly sign up for this to get analysis and visualisation tools of the financial reports provided by Apple. At the time App Annie came about all that Apple provided devs with was a CSV broken down into line items per country. A bunch of companies made paid for visualisation and analysis tools/saas for this data but then app Annie had the bright idea…

So the app developer would download Apple data, load it up on AppAnnie and get a nice bar chart? And an assurance they would not sell the data (without anonymising it). This is who signed up when and who made a purchase etc.

Thank you

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

#35

Post by usmannk »

lifeisstillgood wrote: post #33
usmannk wrote: post #23

Earlier quoted context omitted.

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 tr…

Oh I see yes. But I still read it as similar as going to a bank and saying can you supply me a list of people with over a million dollars and the bank says "we used our aggregated knowledge of our customers to create a statistical model of which of our customers has over a million. Plug your parameters in here and see what pops out" It's a struggle to think this was ever anything but a nod and a wink.

Yeah I agree with that much

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

#36

Post by someguydave »

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.

I actually clicked the button - app annie quoted mid 5 digits per year

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

#37

Post by Closi »

wyager wrote: post #21
detaro wrote: post #13

Earlier quoted context omitted.

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.

The issue is both - if the information was non-public (which it was) then it can’t be legally traded on, and this was being sold as data to be traded on which secretly contained non-public market sensitive information.

I.e. insider trading

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

#38

Post by Closi »

anm89 wrote: post #32
Closi wrote: post #5

So you can deliberately disclose confidential information for the explicit purpose of helping others to ‘unknowingly’ insider trade for 4 years… and the punishment is only to pay less than a month of revenue three years later? Wow.

total insanity. it always makes me think, people get excited about these complicated political schemes to deal with wealth inequality, but I don't see a 10th of that level of excitement to just stop people from being handed 100 million dollar government privileges like this one in the first place

Exactly, if I sold private information to a friend for insider trading we would both be in jail.

If a company sells private information to a hedge fund for insider trading they can ‘settle’ for a fraction of the profits they made.

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

#39

Post by wyager »

Closi wrote: post #37
wyager wrote: post #21

Earlier quoted context omitted.

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.

The issue is both - if the information was non-public (which it was) then it can’t be legally traded on, and this was being sold as data to be traded on which secretly contained non-public market sensitive information. I.e. insider trading

> both - if the information was non-public (which it was) then it can’t be legally traded on

That’s not how insider trading law works in the US. In fact, almost no country works this way, with a few exceptions like France. Insider trading laws in the US are mostly specified in terms of fiduciary obligations.

I suggest subscribing to Matt Levine’s excellent Money Stuff column. He covers this stuff constantly, including lots of court cases straddling the border of what defines insider trading.

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

#40

Post by Closi »

wyager wrote: post #39
Closi wrote: post #37

Earlier quoted context omitted.

The issue is both - if the information was non-public (which it was) then it can’t be legally traded on, and this was being sold as data to be traded on which secretly contained non-public market sensitive information. I.e. insider trading

> both - if the information was non-public (which it was) then it can’t be legally traded on That’s not how insider trading law works in the US. In fact, almost no country works this way, with a few exceptions like France. Insider trading laws in the US are mostly specified in terms of fiduciary obligations. I suggest subscribing to Matt Levine’s excellent Money Stuff column. He covers this stuff constantly, includin…

That's the book definition of insider trading. What's your definition?
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