The Securities and Exchange Commission ('SEC') announced, on 14 September 2021, that App Annie Inc., an alternative data provider for the mobile app industry, has agreed to settle, for $10 million, securities fraud charges for engaging in deceptive practices about how its data was derived. Furthermore, the SEC's order finds that App Annie violated the anti-fraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Additionally, without admitting or denying the findings, App Annie consented to the entry of a cease-and-desist order under which it is ordered to pay the aforementioned fine.

In particular, App Annie dealt with alternative data, which is data that is not contained in companies' financial statements or other traditional data sources, such as the number of times a particular company's app is downloaded, how often it's used, and the amount of revenue the app generates for the company.

More specifically, App Annie promised to companies not to disclose their data to third parties, and assured them that their data would be anonymised before being used by a statistical model to generate estimates of app performance. Nonetheless, according to SEC's findings, from late 2014 through mid-2018, App Annie used non-aggregated and non-anonymised data to alter its model-generated estimates to make them more valuable to sell to trading firms.

You can read the press release here, and the SEC order here.