Why to Aggressively Prosecute Fraud

Even if you don't win, aggressive prosecution deters the creation of a criminogenic ecosystem.

Case in point, Facebook, which has knowingly been defrauding its advertisers for years:

New court documents from the lawsuit, which was filed in Northern California in 2018 by a small-business owner, claim that Facebook personnel knew that its so-called potential reach metric, used to inform advertisers of their potential audience size, was “inflated and misleading”.

The documents go on to name chief operating officer Sheryl Sandberg and David Wehner, Facebook’s financial officer, in the context of internal communications in which they were involved in 2017. Their remarks and actions have largely been redacted from the documents, however, on the grounds that they are commercially sensitive for Facebook.

The lawsuit claims that Facebook represents the potential reach metric as a measure of how many people a given marketer could reach with an advertisement. However, it actually indicates the total number of accounts that the marketer could reach — a figure that could include fake and duplicated accounts, according to the allegations.

In some cases, the number cited for potential audience size in certain US states and demographics was actually larger than the population size as recorded in census figures, it claimed.

………

The new court documents allege that some employees “expressed concerns” about the alleged “inflation” of potential reach but no action has been taken.

One filing alleged that Ms Sandberg made “substantive comments” in a meeting in October 2017 where potential reach was discussed.

Mr Wehner also discussed fake and duplicate accounts in a meeting the same month, but on a later earnings call “did not disclose the direct impact of duplicate and fake accounts . . . on potential reach”, according to the complainants.

Seriously, is there a business in Silicon Valley founded in this millennium which does not have fraud at the core of its business deception.

Actually, we could expand this to pretty much every VC funded business over the past 20 years.