- Cambridge Analytica, the data firm at the center of Facebook's data privacy scandal, is shutting down.
- The firm has been losing clients and facing mounting legal fees, according to the Wall Street Journal.
- In addition to the Facebook controversy, the firm's CEO Alexander Nix was suspended in March after an undercover video appeared to show him offering to bribe and entrap politicians.
- The power players behind Cambridge Analytica have already set up a new company — learn more about it here.
Cambridge Analytica, the data firm used by the 2016 Trump campaign at the center of a scandal involving the misuse of Facebook customer data, is shutting down its operations and declaring bankruptcy, the firm announced on Wednesday.
According to the Wall Street Journal, which first reported the closure, Cambridge Analytica was losing clients in the wake of the Facebook scandal and facing mounting legal fees related to the case. The company added that it has been besieged by negative media coverage, which has "driven away virtually all of the Company’s customers and suppliers."
The news would mark a stunning reversal for a firm that was once celebrated for pioneering a new tech-driven model for political campaigns to reach voters. As recently as Tuesday, CA was fiercely defending its reputation with tweets imploring the public to "get the facts" and the truth behind the Facebook story.
"Over the past several months, Cambridge Analytica has been the subject of numerous unfounded accusations and, despite the Company’s efforts to correct the record, has been vilified for activities that are not only legal, but also widely accepted as a standard component of online advertising in both the political and commercial arenas," the company said in a press release announcing the closure.
The data firm has come under heavy scrutiny and sparked a global debate about data privacy for how it improperly obtained the personal data from 87 million Facebook users in order to serve targeted ads on behalf of the Trump campaign during the 2016 presidential election.
Additionally, Cambridge Analytica's CEO Alexander Nix was suspended in March after an undercover video released by British broadcaster Channel 4 appeared to show him offering to bribe and entrap politicians with sex workers.
The extent of the data collection, which violated Facebook's own policies at the time, and how it was used for targeted political ads was revealed by whistleblower Christopher Wylie and first reported by The Guardian and The New York Times.
The firm is also under investigation in the U.K. for how it used the Facebook data in Leave campaign ahead of the Brexit vote in 2016.
Cambridge Analytica did not immediately return Business Insider's requests for comment.
