Cambridge Analytica Files for Bankruptcy in US Following Facebook Debacle

Cambridge Analytica, the political consultancy at the centre of Facebook's privacy scandal, filed for Chapter 7 bankruptcy in the United States late on Thursday.

This past March allegations surfaced that Cambridge Analytica, hired by President Donald Trump's 2016 US election campaign, improperly used data of 87 million Facebook users beginning in 2014.

Cambridge Analytica and its British parent SCL Elections Ltd said earlier this month that they would shut down immediately and begin bankruptcy proceedings after suffering a sharp drop in business.

The petition to file bankruptcy was submitted at the US Bankruptcy Court Southern District of New York and was signed on behalf of Cambridge Analytica's board by Rebekah and Jennifer Mercer, daughters of billionaire Robert Mercer.

The Mercer family was one of Trump's biggest donors.

Cambridge Analytica LLC listed assets in the range of $100,001 (roughly Rs. 68 lakhs) to $500,000 (roughly Rs. 3.4 crores) and liabilities in the range of $1 million (roughly Rs. 6.8 crores) to $10 million (roughly Rs. 68 crores). 

London-based Cambridge Analytica was created in 2013 initially with a focus on US elections, with $15 million (roughly Rs. 101 crores) in backing from Mercer and a name chosen by former Trump White House adviser Steve Bannon, according to a report by the New York Times.

Facebook has faced multiple investigations in the United States and Europe over its handling of personal data of users, hurting shares of the Mark Zuckerberg-led company.

Zuckerberg has appeared before US congressional committees to testify on data privacy and will meet leaders of the European Parliament soon.

Facebook said on Monday it has suspended around 200 apps in the first stage of its review into apps that had access to large quantities of user data before the company restricted data access.

© Thomson Reuters 2018