The National Whistleblower Center is supporting a whistleblower in a Securities and Exchange (SEC) petition to hold social media companies accountable for allowing looters of antiquities to run smuggling operations from their websites.
War-torn countries with rich cultural heritages, such as Syria, have seen an explosion of looting, oftentimes to finance terrorist activity by the Islamic State and others. As explained in a recent BBC report, looters and buyers connect on Facebook and coordinate their illegal transactions. NWC is providing support to the whistleblowers who brought evidence of Facebook’s role as facilitator, and deceptive statements downplaying this role, to the SEC. As written by the BBC,
“Facebook is being used by networks of traffickers to buy and sell looted antiquities…. The BBC has also seen evidence that antiquities are still being smuggled from Iraq and Syria into Turkey, despite a police clampdown and the retreat of the Islamic State group.”
In a statement, Facebook said coordinating illegal activity was not allowed on the site “and following the BBC’s investigation we have removed 49 groups”.
But Professor Amr al-Azm of Shawnee State University stated that these groups remain active on Facebook even after this alleged removal. He has spent two years researching hundreds of Facebook groups, many of which are private and often have thousands of members, and has co-authored an article entitled “How Facebook Made It Easier Than Ever to Traffic Middle Eastern Antiquities” in World Politics Review.
Working with Katie A. Paul as part of the Athar Project, he released a full report called “Facebook’s Black Market in Antiquities”, found here. The report notes how:
Facebook’s “Groups” feature, which allows users to create and control a contained network of individuals with “shared interests,” has become a facilitator for the expansion of antiquities trafficking networks. The Groups provide a seamless environment for digital interactions and cross-border networking between users interested in buying and selling antiquities, allowing them to communicate efficiently and discretely. The ATHAR Project’s report covers nearly two-years of investigative research and incorporates a case study on Groups based in Syria.
The report page also includes a document of items from the ICOM Red List for Middle East and North African countries that have been shared on Facebook. A CBS News video segment on the report is available here.
This case comes at a time when corporate whistleblowers enjoy broad public support. A Whistleblower News Network poll released in October 2020 shows that the American public considers corporate fraud a national priority and wants to help whistleblowers who expose it. It is time for the SEC to listen to public and this petition and rein in Facebook’s deception of its shareholders and the public on its approach to the sale of antiquities and other illicit activities on its website.
Why the Securities and Exchange Commission?
Facebook is well aware that its website is being used to facilitate the sale of stolen activities, along with other illegal activities. And while it has increased its efforts to remove illegal activity from its website in recent years, there is still no significant data available about the company’s efforts to regulate this type of.
Critically, Facebook is a publicly-traded company, and under U.S. Securities laws, publicly-traded companies cannot profit from illegal activities. By failing to disclose the activities like the illegal sales taking place on the site to investors, Facebook is putting the company—that is, its shareholders—at financial risk.
Shareholders depend on accurate information to guide their decisions on whether to invest in a company. As owners, they are in a unique position to force management to adopt corporate social responsibility practices that are essential to maintaining the company’s social license and long-term profitability. Thanks to the whistleblower protections in the Dodd-Frank amendments, the Securities and Exchange Commission (SEC) is now fully aware of Facebook’s deceptive practices and is well-positioned to act to protect shareholders and the public from continued deception.
The question now is whether the SEC will take the action necessary to achieve meaningful changes in Facebook’s behavior. The Securities and Exchange Act empowers the SEC to pursue civil and criminal penalties when publicly-traded companies make false and misleading statements about matters that materially affect share value. The Dodd-Frank amendments allow the SEC to impose civil penalties through its own administrative proceedings rather than having to go to court, so the SEC has the ability to move quickly.
It is time for the SEC to act. Only through a substantial civil or criminal penalty can the SEC ensure that Facebook’s deceptive practices come to an end and enable shareholders and the public to bring pressure to bear on the company regarding its handling of the sale of stolen antiquities and other illegal activities on the site.