Comscore Settled SEC Charges for Making Fraud to Inflect Revenue

Comscore Settled SEC Charges for Making Fraud to Inflect Revenue

The online ad world thrives on metrics to gauge how effectively its campaigns are working; however, what occurs when the company offering that information is cooking its books? The industry is grappling with that concern at present. Serge Matta have settled SEC charges against fraud to manually inflate revenue by $50 million also otherwise increase their metrics between 2014 and 2016. Matta had Comscore joined “non-monetary transactions” where it will exchange information without expecting money, however, identified revenue on that data based on an elevated sense of its value, and lied to each accountant and auditors about it. That, in turn, made it seem like Comscore was expanding at an unrealistic speed.

Comscore and Matta have to pay individual penalties of $5 million and $700,000, while Matta may even pay another $2.1 million to reflect profits he made out of selling company stock and other compensation. The executive is also banned from serving because of the director or officer of a public company for the next ten years.

Comscore emphasized that it was under new leadership and had new internal procedures to prevent this from happening again. All the identical, the settlement could spark uncertainty among many, however irrational it might be. If Comscore could not be trusted to report its finances accurately, how do advertisers know the data they received was on the level? The same goes for market share estimates and other research. It is unlikely that the data was tainted; however, ad teams may be shy about depending on Comscore in the future out of an abundance of caution.