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
#2No idea if true, but someone once told me that Sequoia essentially owns App Annie and uses the data to win deals on companies before anyone knows they're about to pop. I'm not a lawyer, but if true, pretty brilliant from a purely competitive standpoint (not legal/moral/ethical/etc).
Re: SEC charges App Annie and its founder with securities fraud
#3> The order finds that App Annie and Schmitt understood that companies would only share their confidential app performance data with App Annie if it promised not to disclose their data to third parties, and as a result App Annie and Schmitt assured companies that their data would be aggregated and anonymized before being used by a statistical model to generate estimates of app performance. Contrary to these representations, 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.
Interesting.
Re: SEC charges App Annie and its founder with securities fraud
#4Sub headline more relevant than the headline: "Company Will Pay $10 Million to Settle First Enforcement Action Against Alternative Data Provider".
This is such an insanely good arb for App Annie it boggles the mind. Paying a $10mm vig to the SEC for a scheme that probably minted hundreds of millions in revenue from hedge funds is a no brainer.
If the SEC actually wanted to disincentivize future bad actors they'd prosecute rather than issue hilariously petty fines.
Re: SEC charges App Annie and its founder with securities fraud
#5So 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.
Re: SEC charges App Annie and its founder with securities fraud
#6What 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?
Re: SEC charges App Annie and its founder with securities fraud
#7Sub headline more relevant than the headline: "Company Will Pay $10 Million to Settle First Enforcement Action Against Alternative Data Provider". This is such an insanely good arb for App Annie it boggles the mind. Paying a $10mm vig to the SEC for a scheme that probably minted hundreds of millions in revenue from hedge funds is a no brainer. If the SEC actually wanted to disincentivize future bad actors they'd pros…
Yeah. At those levels, it's essentially a tax.
Re: SEC charges App Annie and its founder with securities fraud
#8So (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 usage!) and which all to invest in (the one with all the usage).
But they found that no-one wanted the aggregated data, or it was nit accurate enough, so they stopped using anonymised data and used the raw data.
but said "it's ok we have permission"
Ok.
So they signed contracts on both sides, which contracts directly contradicted each other - they were always going to get caught.
But this is aggregated app usage data - Apple could publish this in a heart beat and (presumably) it would be legal and App Annie would have no market.
I know that "everything is securities fraud" and if you lie to both sides you will get caught. But this feels like a non-prosecution. The SEC had to - it was so blatent when it gets laid out, but really I doubt anyone thinks this will drain the swamp. It's all usage data.
Edit: less ! marks
Re: SEC charges App Annie and its founder with securities fraud
#9Sub headline more relevant than the headline: "Company Will Pay $10 Million to Settle First Enforcement Action Against Alternative Data Provider". This is such an insanely good arb for App Annie it boggles the mind. Paying a $10mm vig to the SEC for a scheme that probably minted hundreds of millions in revenue from hedge funds is a no brainer. If the SEC actually wanted to disincentivize future bad actors they'd pros…
> If the SEC actually wanted to disincentivize future bad actors they'd prosecute rather than issue hilariously petty fines
The SEC can't prosecute. They can only make criminal referrals to the DoJ.
Re: SEC charges App Annie and its founder with securities fraud
#10Sub headline more relevant than the headline: "Company Will Pay $10 Million to Settle First Enforcement Action Against Alternative Data Provider". This is such an insanely good arb for App Annie it boggles the mind. Paying a $10mm vig to the SEC for a scheme that probably minted hundreds of millions in revenue from hedge funds is a no brainer. If the SEC actually wanted to disincentivize future bad actors they'd pros…
> If the SEC actually wanted to disincentivize future bad actors they'd prosecute rather than issue hilariously petty fines The SEC can't prosecute. They can only make criminal referrals to the DoJ.
I assume DOJ can't prosecute when SEC comes to a settlement agreement?