Facebook Starts Paying a Price for Scandals

For nearly two years, Facebook has appeared bulletproof despite a series of scandals about the misuse of its giant social network.

But the Silicon Valley company’s streak ended on Wednesday when it said that the accumulation of issues was starting to hurt its multibillion-dollar business — and that the costs are set to continue playing out for months.

Facebook reported on Wednesday that growth in digital advertising sales and in the number of its users had decelerated in the second quarter. The company’s leaders, including its chief executive, Mark Zuckerberg, added that the trajectory was not likely to improve anytime soon, especially as Facebook spends to improve the privacy and security of users.

Facebook has grappled with months of scrutiny over Russian misuse of the platform in the 2016 American presidential campaign and the harvesting of its users’ data through the political consulting firm Cambridge Analytica. The results were among the first signs that the issues had pierced the company’s image and would have a lasting effect on its moneymaking machine.

In response, Facebook’s stock tumbled more than 23 percent in after-hours trading, erasing more than $120 billion in market value in less than two hours. If those losses hold up through regular trading on Thursday, the one-day stock decline will be the biggest in Facebook’s history. read more »

3M to pay $9.1 million over defective military ear plugs

The 3M Co. has agreed to pay $9.1 million to settle allegations it knowingly sold defective combat ear plugs to the U.S. military without disclosing defects that limited the effectiveness of the hearing protection devices, the U.S. Justice Department said on Thursday.

Acting Assistant Attorney General Chad Readler said the settlement demonstrated that “government contractors who seek to profit at the expense of our military will face appropriate consequences.” read more »

Browder expands criminal complaint against Danske Bank

Bill Browder, once the biggest foreign money manager in Russia, has filed a new criminal complaint in Estonia concerning Denmark’s largest lender Danske Bank

The new complaint comes two weeks after Browder filed a complaint with the Danish authorities over alleged money laundering at the bank’s Estonian branch in the past.

The bank said last week it would forgo profits made from transactions in Estonia that are subject to a money laundering investigation.

Estonia’s prosecutor’s office confirmed it had received the criminal complaint from Bill Browder concerning Danske Bank but said it was not at liberty to disclose the details.

The prosecutor’s office is analyzing the complaint now and after that it has ten days to decide whether it will begin a criminal investigation, spokesman Kaarel Kallas told Reuters. read more »

As Crypto Meets Prediction Markets, U.S. Regulators Take Notice

The next confrontation between government regulators and a blockchain startup appears set to ensnare a prediction market platform that goes by the name Augur.

After going live on July 10, Augur allows anyone to create contracts to predict future events such as the outcome of basketball games, elections, the price of Bitcoin or the closing value of the Dow Jones Industrial Average. The platform has attracted attention from regulators who oversee derivatives, while Augur’s developers maintain they’re not the ones creating the bets.

Users pay in digital currency to place bets by buying or selling shares according to how they think an event will unfold, and about $1.5 million has been wagered in the first two weeks. The service is decentralized, meaning it’s hosted on computers spread around the world with no central authority in charge. And it appears to be unstoppable after pre-existing code was triggered to deactivate the only way to shut down the current version of the software on July 24.

Yet there are potential issues looming for Augur. First, at least two contracts allowing users to bet on whether U.S. President Donald Trump will be killed in July or the rest of 2018 are listed on the site. Second, creating a way to bet on the value of goods in the future is basically the definition of a type of derivative known as a binary option, yet Augur hasn’t sought approval from the Commodity Futures Trading Commission to list such contracts. read more »