Silicon Valley Tech News Roundup – February 26th

EU Commission bans TikTok on official devices – 2/23

In a statement published on Thursday, the European Commission announced it is banning employees from installing and using TikTok on their official and personal devices. Sonya Gospodinova (the EU Commission spokesperson) stated the EU Commission decided to implement the decision because of security reasons and concerns about how the company handles the users’ data.

The statement reads: “This measure aims to protect the Commission against cybersecurity threats and actions which may be exploited for cyber-attacks against the corporate environment of the Commission… The security developments of other social media platforms will also be kept under constant review.”

In November last year, TikTok released a statement saying the company’s employees in China can access EU users’ data. However, the company denied it would make the data available to the Chinese government.

Following the decision, Caroline Greer (head of public policy at TikTok) tweeted: “The European Commission’s suspension of TikTok on corporate devices is misguided and based on fundamental misconceptions… We have requested a meeting to set the record straight.” She further added: “We are continuing to enhance our approach to data security – establishing three data centers in Europe to store user data locally; further reducing employee access to data; and minimizing data flows outside of Europe.”

Prosecutors hit Sam Bankman-Fried with four additional criminal charges – 2/24

Prosecutors hit Sam Bankman-Friend (the former CEO of FTX) with four additional criminal charges. The prosecutors allege Sam Bankman-Fried and two former FTX executives conspired to donate tens of millions of dollars to politicians so they would pass laws favorable to his company. The authorities are also charging Sam Bankman-Fried with bank fraud.

Prosecutors claim he made political donations with corporate funds or through “straw” donors. That allowed Sam Bankman-Fried to avoid contribution limits. He instructed one executive to donate to Republican candidates while the other had to make donations to left-leaning politicians. Alameda Research funded the donations, and these included FTX customers’ funds.

Sam Bankman-Fried now faces 12 criminal charges. His spokesperson declined to comment. Bahamian authorities arrested and extradited him to the United States. The judge released him on $250 million bail in December, and set the trial date for October 2nd.

Carlos Watson (the founder of Ozy Media) arrested for fraud – 2/24

On Thursday, the authorities apprehended Carlos Watson (the founder of Ozy Media) on federal fraud charges. The authorities allege Watson “directed a scheme to defraud investors.” Samir Rao (a former executive of Ozy Media) pleaded guilty to wire fraud and securities fraud conspiracy days earlier.

Watson’s lawyer gave a statement to NBC Media and said he was “deeply disappointed by the events of today.” He added: “We were engaged in a good faith and constructive dialogue with the government… Given the department’s claims of promoting such dialogue, I do not understand the dramatic decision to arrest Carlos today.”

The authorities are accusing Watson and Rao of false statements about the company’s revenue, and claiming high-profile companies and celebrities invested in Ozy Media. The New York Times reported Rao impersonated a YouTube executive during a potential investor call with Goldman Sachs. The prosecutors claim Watson and Rao did this on several occasions in order to cover up their false statements about the company’s financials when facing investors.

The Securities and Exchange Commission and the Department of Justice also launched investigations into the company.

Another company sues Twitter for failing to pay its bills – 2/24

This week another company sued Twitter for failing to pay its bills. Writer, Inc. filed a complaint with the California Superior Court in San Francisco. It claims Twitter failed to pay $113,856 for its service. Writer, Inc. is an AI company that helps employees of other companies create content in line with their brand guidelines.

Writer, Inc. is the sixth company suing Twitter for nonpayment and breach of contract. Other companies suing Twitter include its landlord in San Francisco, two different consulting companies, an event-planning company, and a private jet transportation service provider. On Thursday, Twitter also stopped its employees from using Slack after failing to pay the bill for its services. Ella Irwin (Vice President of Product, Trust, and Safety at Twitter) said to CNBC: “We do not comment on pending litigation or various speculation surrounding Twitter’s financial health.”

Meanwhile, experts claim these nonpayment disputes are not common after buyouts. Edith Hotchkiss (finance professor at Boston College) said nonpayment disputes are “more typical of companies that are within a very short window of filing for bankruptcy.”