It is essential that data from any source be legally compliant and ethically sourced. That is not up for discussion.
But what happens when the lines are blurred? Or laws change? Well, here at onefourzero we trade on good data and ensuring data integrity is at the fore of what we do. We have built technology to automate this process to some extent and employ lawyers to ensure compliance. But what happens when a supplier’s data comes into question?
Luckily that has never happened to us. Because we cross-reference and triangulate data sets, there is less risk to data integrity. Sometimes it is not always the fault of the data supplier either. For example, changes to laws may mean that suppliers must adhere to different regulations that affect their business.
However, we have to acknowledge that sometimes it is the fault of the data supplier. Take App Annie, for instance. The company has agreed to pay $10 million to settle a securities fraud investigation, the US Securities and Exchange Commission (SEC) recently announced. The data provider was investigated on fraud charges for “engaging in deceptive practices and making material misrepresentations about how App Annie’s alternative data was derived”. This is the first enforcement action charging an alternative data provider with securities fraud.
Emmett Kilduff, Founder and Executive Chairman of the alternative data provider Eagle Alpha, said: “Last week saw the first SEC enforcement action related to alternative data. Having been in the space since 2012, I was initially saddened. However, I think it will actually strengthen the alternative data industry because there will be even more stringent legal and compliance checks and procedures.”
And we agree. “We understand that data integrity on all levels is paramount and give comfort to our clients in having ensured SEC, GDPR and CSRB compliance across the board.” Fleur Hicks, CEO of onefourzero assures. That App Annie declined to contribute to Eagle Alpha or onefourzero’s industry-standard dataset due diligence questionnaire (DDQs), set by FISD, was certainly the warning sign that we needed to steer clear of procurement.
It is up to others in the industry to do the same and beat the drum on ethical data use, secure data management, and promote the use of alternative data in M&A and consulting.