FBI agents reportedly visited ex-Snap employees at home as part of an investigation into IPO disclosures

  • Federal investigators showed up at the homes of former Snap employees about a year ago as part of an official inquiry into the company’s IPO disclosures.
  • The agents asked about how Snap collects and reports users statistics, according to a Wall Street Journal report.
  • Snap is thought to be under investigation from the DOJ and SEC about its disclosures around competition from Instagram.
  • Snap said it doesn’t have full visibility into the investigation but said it believes the inquiry relates to Instagram.

FBI agents showed up unexpectedly at the homes of former Snap employees last year to enquire into how the company collects and reports user data, according to the Wall Street Journal.
The probe appears to be related to an ongoing US Justice Department and SEC investigation into Snap’s pre-IPO disclosures about rising competition from Instagram.
Snap declined to comment on the Wall Street Journal report. In November, the company said: “While we do not have complete visibility into these investigations, our understanding is that the DOJ is likely focused on IPO disclosures relating to competition from Instagram.” Instagram has grown hugely in popularity, overtaking Snapchat in terms of popularity among US teens earlier this year. It’s achieved that partly by ruthlessly copying everything Snapchat does. That pill is made more bitter by the fact that Spiegel has reportedly turned down multiple acquisition approaches from Instagram’s parent company Facebook.
The FBI query about statistics came after a former Snap employee, Anthony Pompliano, filed a lawsuit in early 2017 alleging that Snap had misled the public about its user numbers to inflate its valuation. Snap described the suit as “meritless” and characterised Pompliano as a disgruntled employee. A federal judge halted the lawsuit in April 2018, and the dispute is in private arbitration.
Source: Business Insider
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