SASB Eyes Standards on Internet Content

Guidelines are expected next year on data privacy, freedom of speech, and harmful content.


The Sustainability Accounting Standards Board (SASB) is setting standards for content governance on social media platforms, the board decided last week in a meeting. 

SASB will develop guidelines around data privacy, freedom of speech, and harmful content, the organization said. The decision comes as investor concerns about mismanagement of user-generated content and advertisements by technology companies are growing. Of course, the board has no power to enforce such standards, but hopes to use them to hold companies to account.

“These problems are not new and they’re not going away,” Greg Waters, the technology and communications sector analyst at SASB, said in a presentation. The group hopes to complete the project by the end of next year. 

Investors are worried that internet companies, bearing the brunt of responsibility when it comes to moderating content on their platforms, will lose advertising dollars from mismanaging harmful data. Content management also requires costly investments into machine learning or additional workers to handle the backlog.

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About three-quarters of the top 20 internet media and services companies have exposure to issues concerning user-generated content, including Facebook and Google parent Alphabet, which together hold a duopoly on internet real estate. The two hold about 60% of all online advertising revenue in the US. 

A string of child exploitation controversies on Google’s YouTube in recent years has spurred a number of advertiser boycotts. And revelations that user data was harvested from Facebook by Cambridge Analytica for targeted political campaigning have dogged the former social media darling since 2016. 

The top 20 list does not include other companies that own social media businesses, such as Microsoft’s LinkedIn platform or Oracle, which aims to strike a deal with video sharing app TikTok Global and its Chinese owner Bytedance. The negotiations are coming in the midst of a controversy involving the Beijing regime and the Trump administration.

SASB will not develop content moderation guidelines for worker safety, which the research team decided was out of scope of the standards-setting project, though members said they will continue to review risks around mental health. 

In recent years, contract workers at content moderation firms have reported suffering trauma after reviewing hours of violent videos involving murders, rapes, and suicides. This week, a former YouTube moderator sued the company for failing to adequately protect workers from the mental toll of the job.

“As we continue to build out the human capital pipeline in terms of the tech sector broadly, this is going to be very high on my list of things to continue to evaluate,” Waters said. 

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Former Cyberfraud Prevention Firm CEO Arrested for Fraud

Adam Rogas could face up to 45 years in prison for his alleged role in a $123 million securities fraud scheme.


Fortunately for Adam Rogas, irony isn’t a crime. The former head of cyberfraud prevention company NS8 Inc. was charged in Manhattan federal court with three kinds of fraud for his alleged part in a $123 million fundraising scam.

According to the unsealed complaint filed in the Southern District of New York, Rogas allegedly used fraudulent financial data to obtain more than $123 million in financing for NS8, and he kept approximately $17.5 million of that for himself. He was charged in federal court with securities fraud, fraud in the offer and sale of securities, and wire fraud.

“As alleged, Adam Rogas was the proverbial fox guarding the henhouse,” acting Manhattan US Attorney Audrey Strauss said in a statement. “While raising over $100 million from investors for his fraud prevention company, Rogas himself allegedly was engaging in a brazen fraud.”

Rogas was a co-founder, CEO, and chief financial officer (CFO) of Las Vegas-based NS8, as well as a member of its board of directors. He was also responsible for the company’s fundraising activities, according to the complaint. NS8 developed and sold electronic tools to help online vendors assess the fraud risks of customer transactions. Last fall and this spring, NS8 engaged in fundraising rounds through which it issued series A preferred shares.

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Rogas allegedly controlled a bank account into which NS8 received revenue from its customers, and he distributed monthly statements from that account to NS8’s finance department so financial statements could be created. He also controlled spreadsheets that purportedly tracked customer revenue, which were also used to generate NS8’s financial statements, according to the complaint.

The complaint alleges Rogas altered the bank statements before providing them to NS8’s finance department in order to show tens of millions of dollars in customer revenue and bank balances that did not exist. 

“From January 2019 through February 2020, the percentage of total reported assets from the NS8 balance sheet that were fictitious ranged from at least approximately 40% to over 95%,” according to the complaint, which also said there was “at least approximately $40 million in fictitious revenue that appears on the fraudulent bank statements but was not, in fact, received by NS8.”

Prosecutors also allege Rogas provided the fake bank records during the fundraising process to auditors who were conducting due diligence on behalf of potential investors. When the fundraising rounds ended, NS8 conducted a tender offer with the funds raised from investors and Rogas received $17.5 million in proceeds, personally and through a company he controlled, the complaint said.

The charges of securities fraud and wire fraud each carry a maximum sentence of 20 years in prison, and the charge of fraud in the offer or sale of securities carries a maximum sentence of five years in prison.

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