The embattled political consulting firm Cambridge Analytica announced on Wednesday that it would cease most operations and file for bankruptcy amid growing legal and political scrutiny of its business practices and work for President Trump.
The decision came less than two months after the firm and Facebook became embroiled in a data-harvesting scandal that compromised the information of up to 87 million people. The revelations about the misuse of data, by The New York Times, along with The Observer of London, plunged the social media giant into crisis and prompted regulators and lawmakers to begin investigations into Cambridge Analytica.
In a statement posted to its website, Cambridge Analytica said it was filing for bankruptcy in both the United States and Britain.
“Over the past several months, Cambridge Analytica has been the subject of numerous unfounded accusations and, despite the Company’s efforts to correct the record, has been vilified for activities that are not only legal, but also widely accepted as a standard component of online advertising in both the political and commercial arenas,” the company’s statement said.
The company did not reply to requests for comment.
The news was earlier reported by The Wall Street Journal and Gizmodo.
The company, founded by Stephen K. Bannon and Robert Mercer, a wealthy Republican donor who has put at least $15 million into it, offered tools that it claimed could identify the personalities of American voters and influence their behavior. Its so-called psychographic modeling techniques, which were built in part with the data harvested from Facebook, underpinned Cambridge Analytica’s work for the Trump campaign in 2016.
But Cambridge Analytica has come under growing scrutiny over the past year, first for its purported methods of profiling voters and more recently over improperly harvesting private data from Facebook users. The company had also been drawn into the special counsel investigation of Russian interference in the 2016 elections.
Facebook has since announced a slew of changes to its policies for collecting and handling user data. Its chief executive, Mark Zuckerberg, also testified before Congress, where he faced criticism for failing to protect users’ data.
The controversy dealt a major blow to Cambridge Analytica’s ambitions of expanding its commercial business in the United States., while bringing attention to the American government contracts sought by its British affiliate, the SCL Group, an intelligence contractor.
In recent months, executives at Cambridge Analytica and SCL, along with the wealthy Mercer family — the principal owners of Cambridge Analytica — moved to created a new firm, Emerdata, based in the United Kingdom. One SCL executive has publicly described the new firm as a way of rolling up the two separate companies under one new banner.