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.
The SEC can't prosecute. They can only make criminal referrals to the DoJ.
(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
> [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 trading firms insider information while swearing it was actually just a really good statistical model. Presumably the actual model wasn't good enough, so they started using unaggregated data to eke out perf.
What they did is not just breach of contract, but insider trading as they fed private information to trading firms.
> 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.
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.
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 of offering it for free and using the data to create aggregated (or not) intelligence tools.
Thank you
Wow.
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
If a company sells private information to a hedge fund for insider trading they can ‘settle’ for a fraction of the profits they made.
This was a pretty big benefit when all Apple offered was an unwieldy CSV broken out into line items for each country, but less so today.
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.
Interesting.
https://en.wikipedia.org/w/index.php?limit=500&profile=all&n...
https://en.wikipedia.org/w/index.php?search=App+Annie&title=...
Surely giving access to your app’s data to a random company is not without risks and is kind of irresponsible specially more so if you’re a public company having fiduciary duties to your investors.
Nice to see the government making a statement about this pretty known practice. When the government doesn’t do anything people think its a tolerated practice. Its better for the government to even lose if it allows for the position of the administration to be made clear.
That's what this announcement is. The SEC charged them. They settled. The investigation, meanwhile, provides documentary evidence for some of the wronged to pursue claims against the wrongdoers.
I.e. insider trading
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.
This is incorrect. The SEC has no prosecution authority. That means it can't prosecute. It also means it can't take criminal prosecution off the table.
Presumably the goal is to lower the number of three letter agencies investigating you.
Your definition would mean a cab driver would be insider trading if he overheard random speculation about a company that turned out to be true--that's not illegal. However, if the cab driver's passenger said, "hey, I'm an executive at at XYZ and I saw that we're acquiring FGH," that is insider trading three ways: the driver believed they were receiving confidential information, the executive breached his duty, and the executive caused stolen information to be traded. And an acquisition would of course meet the material test.