A key focus of NWC’s social media accountability campaign is curtailing illegal wildlife trafficking on Facebook and other social media websites. So far, we have filed four whistleblower petitions with the Securities and Exchange Commission (SEC). These petitions provided extensive evidence regarding how the companies owning these websites have misled shareholders and the public about the extent of wildlife crime they have been facilitating.
The wildlife trafficking petitions were the subject of an April 2018 Associated Press story entitled “Body Parts from Threatened Wildlife Widely Sold on Facebook” and a June 2018 feature article in WIRED entitled “How Facebook Groups Became a Bizarre Bazaar For Elephant Tusks.” These articles both detail how NWC has become the leader in developing and implementing a cutting-edge strategy for wildlife conservation that focuses on whistleblower enforcement of disclosure laws under the Securities and Exchange Act.
NWC has also been working to ensure that Facebook cooperates with the U.S. Department of Justice (DOJ) and other law enforcement authorities in curtailing wildlife trafficking on the website. In a letter to Facebook CEO Mark Zuckerberg in October 2018, NWC requested that Facebook immediately start cooperating with the DOJ’s efforts to investigate and halt wildlife trafficking.
NWC learned the DOJ had subpoenaed information about illegal wildlife trafficking occurring on Facebook and that the social media giant provided data in a raw format that is very difficult and costly to analyze. NWC is committed to ensuring that Facebook stops the stonewalling and provides meaningful cooperation to crucial DOJ investigations into wildlife trafficking on its website.
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.
As our Board Chairman Stephen Kohn observed, “It is intolerable that a corporation with the wealth and international reach of Facebook can play a major role in the ongoing extinction crisis, which has already claimed the last male Northern White Rhino, by selling products from animals on the critically endangered species list.”
Why the Securities and Exchange Commission?
Facebook is well aware that its website is being used to facilitate wildlife trafficking, 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 wildlife trafficking.
A 2018 letter to the U.S. Securities and Exchange Commission (SEC) from the House Natural Resources Committee by Rep. Raul M. Grijalva and Rep. Jared Huffman demanded an investigation into the illegal wildlife trafficking on Facebook. The letter noted that:
“Facebook’s lack of disclosure of the illegal activity facilitated by its site and its failure to take adequate steps to address that activity are both violations of SEC rules.”
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 wildlife trafficking 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 wildlife trafficking and other illegal activities on the site.
Facebook In The News
How Facebook Groups Became A Bizarre Bazaar For Elephant Tusks – Read this Wired post on the illegal activity. Facebook is a publicly traded company and could pose major fines by the SEC. The SEC could impose financial penalties that would pressure the company to close these wildlife marketplaces and also potentially land major monetary awards for whistle-blowers in countries where wildlife trafficking is most widespread.
Facebook Wildlife Trafficking Report Spread Around World – News outlets around the United States have picked up and expanded upon an Associated Press story about the whistleblower complaint to the Securities and Exchange Commission (SEC) lodged against Facebook. The story has been published in news sources in Asia, Europe, and Latin America.
Facebook Whistleblower Alleges Company Chooses to Profit from The Trafficking of Endangered Species – The whistleblower law firm of Kohn, Kohn and Colapinto announced that it filed the anonymous whistleblower complaint against Facebook with the U.S. Securities and Exchange Commission Office of the Whistleblower alleging that Facebook is knowingly profiting from the trafficking of endangered species.
Congress Questions Facebook CEO on Wildlife Crime – Facebook CEO Mark Zuckerberg received tough questions from members of Congress about wildlife trafficking and the illegal ivory trade on his two-billion user social media site.
Facebook Is Linked to Illegal Ivory Trade, SEC Complaint Claims – Kohn, Kohn & Colapinto filed a complaint with the Securities and Exchange Commission (SEC) originally last August, but it became public on April 9.
Congressmen urge SEC to investigate Facebook for facilitating wildlife trafficking – Reps. Raul Grijalva and Jared Huffman wrote a letter to SEC suggesting that Facebook is breaking laws that require public companies to protect shareholders and prevent illegal activity.
Everybody Is Talking About It: Facebook’s Wildlife Black Market – National Whistleblower Center featured in ABC News, New York Post & more.