Facebook Whistleblower

Facebook is synonymous with societal change through online social media for better and for worse. Recently, one of its top internal employees has come out as a whistleblower. Frances Haugen, worked for Facebook starting in 2019 in its misinformation division. Haugen recently discussed Facebook’s profits over public interest philosophy on 60 minutes. This goes almost entirely against what Facebook has said in congressional hearings over the past few years. Facebook is a major platform for investing companies to solicit potential investors for Rule 506(c) offerings. Therefore it is incredibly important to see how the company treats misinformation as there are as many scam investments as there are authentic ones.

According to Haugen, Facebook knows how to keep its platform safer, yet chooses not to take action in order to increase its profits. Allegedly, Facebook promotes hate filled content as well as misinformation as it has the largest potential for profit as this type of content tends to increase engagement. Haugen copied tens of thousands of internal documents and research to back up claims of internal unethical practices. She has called on Congress to take action to curp Facebook’s supposed dangerous effect on society.

For the finance field Facebook can be a great tool for finding and connecting with potential clients and investors. Particularly with Regulation D offerings where general solicitation is permitted. Unfortunately, this has also led to many scams and fraudulent investment opportunities that advertise themselves on Facebook and other social media platforms. It can be incredibly difficult for an investor to determine the difference between a great investment and one that is actually a scam. If everything Haugen says is true this is bad for the finance industry, as it sounds like investment scams might be easier to end. However, if Facebook really does allow misinformation to continue on the platform to increase their own profits, these scams will continue to persist or even get worse.

In the meantime, it is important to differentiate your fund from those other scams by showing legitimacy. One way to do this is by using an established accredited investor verification provider to ensure you are being fully compliant with SEC federal regulations. This step is not only essential to do if you are generally soliciting on any platform, not just Facebook, it is also a great way to avoid an investor thinking you are a scam. Find out more information about the accredited investor definition on our FAQ page and our blog.