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2018年3月14日 星期三

Overnight Tech: Busy day at SEC | Theranos founder charged with fraud | Former Equifax exec accused of insider trading | Trump sends signal with Broadcom veto | FEC proposes changes to online ad rules | YouTube turns to Wikipedia to fight conspiracies

 
 
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BUSY DAY AT THE SEC: The Securities and Exchange Commission (SEC) on Wednesday announced charges against executives from Equifax, the hacked credit agency, and Theranos, the once-revered health startup.

 

Former Equifax CIO Jun Ying was charged with insider trading for selling nearly $1 million in company stock during the period after the credit bureau discovered the hack, but before they went public with it. The SEC alleged that Ying saved more than $100,000 in stock value on the sale.

According to the agency, Ying learned of the hack that exposed personal information of more than 145 million people as early as August 25 and made the stock sale on August 28. The company did not announce the breach until September 7.

"As alleged in our complaint, Ying used confidential information to conclude that his company had suffered a massive data breach, and he dumped his stock before the news went public," Richard R. Best, head of the SEC's Atlanta office, said in a statement. "Corporate insiders who learn inside information, including information about material cyber intrusions, cannot betray shareholders for their own financial benefit."

 

And Theranos CEO and founder Elizabeth Holmes and former company president, Ramesh "Sunny" Balwani, were hit with "massive" fraud charges over their claims about the disgraced blood-testing company's technology.

The SEC said the two raised more than $700 million from investors through an "elaborate, years-long fraud in which they exaggerated or made false statements about the company's technology, business, and financial performance."

Holmes and the company have agreed to settle the charges. Holmes will be fined $500,000, prohibited from serving as an executive of a public company for the next decade and relinquish her company shares. The settlement is subject to court approval. Balwani, on the other hand, will face a court battle with prosecutors.

"The Theranos story is an important lesson for Silicon Valley," Jina Choi, the SEC's San Francisco director, said in a statement. "Innovators who seek to revolutionize and disrupt an industry must tell investors the truth about what their technology can do today, not just what they hope it might do someday."

 

Extra read: The New York Times looks at "the lengths Theranos went" to deceive investors. And Michael Hiltzik in the Los Angeles Times notes that there are other companies like Theranos out there.

Also, it's a good day to revisit this 2016 Wall Street Journal story on Theranos whistleblower Tyler Schultz. Bob Davis from the WSJ also points out that the fall in Theranos stock cost News Corp. executive co-chairman Rupert Murdoch $100 million.

 

Please send your tips, comments and too early odds for Tiger Woods at The Masters to Ali Breland (abreland@thehill.com) and Harper Neidig (hneidig@thehill.com) and follow us on Twitter: @alibreland and @hneidig. We're also on Signal and WhatsApp. Email or DM us for our numbers. Bonus points if you send a Kanye Madness bracket.

 
 
 
 

TRUMP SENDS SIGNAL WITH BROADCOM VETO: President Trump's decision to block Broadcom's hostile takeover of Qualcomm, which would have been the biggest tech acquisition in history, shows that he is taking a broader view of what constitutes a national security threat than his predecessors.

The administration's perspective is infused with Trump's protectionist instincts, blurring the lines between economic and national security, and seems to place heavy importance on emerging technologies like 5G wireless networks.

"They are more willing to link economic and national security than previous administrations might have been," said Adam Segal, an expert on emerging technologies and national security at the Council on Foreign Relations.

A White House official, who was not authorized to discuss the matter publicly, also told The Hill that Broadcom's "relationships with third-party foreign entities" weighed on the president's decision, but declined to elaborate.

Read more here.

 

Broadcom on Wednesday formally withdrew their offer for Qualcomm. Read more on that here. Also: The Wall Street Journal looks at the long road to Trump's decision: "Rejection of Qualcomm-Broadcom deal followed monthslong strategy." Marketwatch meanwhile breaks down what the failed deal could mean for Broadcom's future growth.

 

FEC PROPOSES CHANGES TO ONLINE AD RULES: The Federal Election Commission introduced a draft proposal Wednesday that would amend regulations on online political advertising.

The two new proposals would change rules around internet communication disclaimers and change the agency's definition of "public communication."

"Both proposals are intended to give the American public easy access to information about the persons paying for and candidates authorizing these internet communications, pursuant to the Federal Election Campaign Act," the draft proposal reads.

Currently, public communication is defined by the FEC as excluding internet communications, except for paid advertising on a website. The agency wants to expand this to reflect how the internet has changed and exists across platforms.

Read more here.

 

YOUTUBE TO USE WIKIPEDIA TO FIGHT CONSPIRACIES: YouTube is stepping up its effort to fight the spread of conspiracy theories on its platform, adding information from Wikipedia to run alongside conspiracy theory videos.

The company will now show text from Wikipedia and other third-party sources next to relevant YouTube videos propagating conspiracy theories. The video giant will roll out the feature in the coming months, YouTube CEO Susan Wojcicki said at the South By Southwest tech conference on Wednesday.

"Our goal is to start with a list of conspiracies around the internet where there's a lot of active discussion," she said, according to Bloomberg.

Read more here.

 

Not so fast... Wikipedia, though, says they weren't told of YouTube's plans. The Verge on the "awkward" situation. And click here for Wikimedia's statement. USA Today reports that some critics are already crying foul.

 

GOOGLE BANS CRYPTOCURRENCY ADS: Google says it is moving to bar cryptocurrency advertisements from its platform.

The company is updating its financial services ad policy to ban ads related to cryptocurrency products and services like initial coin offerings, exchanges, wallets and trading advice.

The policy changes are slated to go into effect in June, according to a company post.

Google's decision follows a similar move by Facebook, which decided in January to ban all cryptocurrency-related ads.

Twitter said earlier this month that it is also taking steps to crack down on cryptocurrency advertisements, but has not yet taken as strong a stance as Facebook and Google.

Read more here.

 

FACEBOOK BANS FAR-RIGHT UK GROUP RETWEETED BY TRUMP: Facebook has banned from its platform the pages of far-right British group Britain First and its two leaders, one of whom President Trump retweeted last year.

Facebook said in a statement that content posted by the Britain First Facebook page and the pages of its party leaders, Paul Golding and Jayda Fransen, have "repeatedly broken our Community Standards."

The social media giant said it recently gave the page's administrators a written final warning, but they continued to post content "that violates our Community Standards."

"As a result, in accordance with our policies, we have now removed the official Britain First Facebook Page and the Pages of the two leaders with immediate effect," the statement said.

Read more here.

 

ON TAP:

Bill Gates will speak at a Politico Playbook event at 8 a.m.

FCC Chairman Ajit Pai will speak at the Cato Institute at noon on wireless technology.

The House Financial Services Committee will hold a hearing on how hackers profit from stolen data at 2 p.m.

 

IN CASE YOU MISSED IT:

The Guardian: Ben Tarnoff makes the case for democratizing data in an op-ed.

Wired's obituary of Stephen Hawking

The New York Times: Tech leaders are growing up (again). That's a good thing.

 
 

Join The Hill on Wednesday, March 21, for Leadership in Action: The Hill's Newsmaker Series featuring Sen. Lamar Alexander (R-Tenn.) and Reps. Nanette Barragán (D-Calif.), and Joe Crowley (D-N.Y.). RSVP Here

 
 
 
 
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