Streetwise for Sunday, April 15, 2018
Facebook CEO Mark Zuckerberg appeared before the House Commerce Committee on April 11, to explain his company’s part in the Cambridge Analytica data breach scandal.
The story broke on March 17 that Cambridge Analytica, a “strategic communications” consultancy, had harvested information from the profiles of 50 million Facebook users, now thought to be closer to 87 million, and sold it on to the Donald Trump campaign for use in the micro-targeting of swing voters in the run-up to the 2016 US presidential election.
Cambridge Analytica had acquired the data from Global Science Research, a firm run by academic Dr. Aleksandr Kogan, who had been carrying out a personality test using a third-party app called This is Your Digital Life that required its 270,000 paid participants to provide access to their Facebook pages.
Doing so allowed Dr. Kogan to view not only their profiles but those of their wider friendship networks as part of a study of “psychographics”, the mapping of an individual’s personality based on their behavior online and the posts they like and share.
The issue probably has a degree political implication and substantial implication for Facebook’s share price. However, that is not what concerns me as much as the fact that for whatever the reason, data had been harvested in a manner that was deceiving. Furthermore, it would not be much of stretch to conceive that the data could be used for more nefarious purposes than simply trying to influence political behavior.
Those desiring to perpetrate fraud are endlessly creative. Bogus Jamaican lotteries, false marriages for immigration purposes, mediocre seafood marketed as better seafood, insurance rip-offs from fake accidents and fires, even foreign substandard cheese passed off as being domestic top-shelf, are only the appetizer.
Much of the illicit money involves the three key areas of fraud: Medicare, mortgages and various variations of identity-theft. Do think Facebook might have inadvertently made identity-theft easier?
The Federal Trade Commission has ranked Florida the first in identity theft complaints. The number of false federal income tax returns in South Florida is 46 times the national average, according to a Treasury Department report.
Now do you think such activity would be aided by ease of access to all the personal data found on sites such as Facebook.
If you are a snowbird, remember that Florida does not have a monopoly on scam artists. Everyone remembers Bernie Madoff and how he relied heavily on his religion to gain entry to wealthy Jewish investors and institutions.
Shawn Merriman, aka the “Mormon Madoff,” was a well-respected investment broker and a lay bishop in the Church of Latter Day Saints, known more commonly as the Mormons. For 14 years, he ran a Ponzi scheme that bilked investors, including his own mother, out of more than $20 million.
Being able to discuss Scripture is neither a prerequisite for, nor an affirmation of financial acuity. Donald Nadel and Joseph Malone, operating as the Renaissance Asset Fund, raised more than $16 million, largely from members of the Jehovah’s Witnesses. The pair promised risk-free returns of 10 percent to 25 percent in as little as four months. Renaissance was nothing more than a Ponzi scheme.
U.S. Mail is not immune. The Postal Inspection Service is offering a $50,000 reward for information leading to the arrest and conviction of anyone involved in 13 recent robberies of letter carriers in South Florida. One was slain in 2010 for his mailbox key.
Yes, I understand that greed can have a perverse effect on both the wealthy and the not so wealthy. What human trait do you think built Las Vegas? Why does virtually every State have a lottery? Everyone wants the riches of life without working for them. If you believe that investing on Wall Street is part of the same church, just a different pew, you are wrong.
Anyone can achieve investment success. The key requirement is simply to invest in tried and true-blue chip companies with years of increased earnings and dividends.
Lauren Rudd is a financial writer and columnist. You can write to him at LVERudd@aol.com. Phone calls accepted between 9 AM and 3 PM at (941) 706-3449. For back columns please go to www.RuddReport.com.