Political consulting firm Cambridge Analytica, which was embroiled in a Facebook-related scandal, announced on Wednesday that it would stop the majority of its operations and file for bankruptcy. Its British parent firm SCL Elections Ltd is also shutting down as a result of the sharp drop in business and the increased scrutiny of their business practices and work for Donald Trump’s presidential campaign.
The decision comes less than two months after Cambridge Analytica and Facebook became involved in a data-harvesting controversy which resulted in 87 million users’ personal information being compromised, The New York Times writes. The scandal prompted lawmakers to start investigating the consulting firm.
Cambridge Analytica posted a statement on its official website in which it said almost all of its customers had been driven away by the controversy and it had to file for bankruptcy as a result. SCL Group will also shut down, leaving open the question as to who would retain its intellectual property.
“The siege of media coverage has driven away virtually all of the Company’s customers and suppliers,” the statement said. “As a result, it has been determined that it is no longer viable to continue operating the business, which left Cambridge Analytica with no realistic alternative to placing the company into administration.”
The statement also said that the allegations against Cambridge Analytica are “unfounded,” adding that its activities are legal and “widely accepted as a standard component of online advertising in both the political and commercial arenas.”
The firm shut down effective Wednesday and employees were told to turn in their computers. The Cambridge Analytica sign had been removed from the reception area of its London offices on Wednesday.
Britain’s data regulator said that it was continuing its civil and criminal investigations of the company despite the shutdown.
“We will also monitor closely any successor companies using our powers to audit and inspect, to ensure the public is safeguarded,” a spokeswoman for the Information Commissioner’s Office said in a statement.
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