However, App Annie used confidential Connect data in its non-aggregated and non-anonymized form to change Intelligence estimates closer to Connect users’ actual app performance metrics.
Furthermore, the SEC found that the respondents told its subscribers that it had internal controls and processes to prevent misuse of confidential Connect data and to ensure that App Annie is in compliance with federal securities laws. However, during the relevant period, App Annie didn’t have internal controls and processes.
According to the SEC, App Annie and its co-founder made misrepresentations and engaged in other deceptive practices. They violated Section 10(b) of the Exchange Act and Rule 10b-5.
In a statement, SEC Enforcement Division Director Gurbir Grewal said, “Here, App Annie and Schmitt lied to companies about how their confidential data was being used and then not only sold the manipulated estimates to their trading firm customers but also encouraged them to trade on those estimates—often touting how closely they correlated with the companies’ true performance and stock prices.”
