AOC asked the SEC to investigate Palantir ahead of direct listing

  • Rep. Alexandria Ocasio-Cortez wrote a letter to the Securities and Exchange Commission asking for the agency to investigate the data-mining company Palantir ahead of its stock-market debut, which it made on Wednesday.
  • Among the congresswoman’s concerns is Palantir’s longtime penchant for secrecy, which she wrote could hurt future investors.
  • Other concerns listed are its domestic and foreign contracts, including with Immigration and Customs Enforcement, law-enforcement agencies, and foreign governments that “may present human rights risks.”
  • Palantir, a famed Silicon Valley startup founded in 2003, has a reputation for being secretive and has come under scrutiny recently ahead of its direct listing.
  • Visit Business Insider’s homepage for more stories.

Rep. Alexandria Ocasio-Cortez wrote a letter to the US Securities and Exchange Commission in mid-September asking the agency to investigate the secretive data firm Palantir as the company gained attention with its stock-exchange plans.

In the letter, the congresswoman listed several concerns pertaining to the Peter Thiel-founded Silicon Valley startup. But her primary grievance was the startup’s failure to fully disclose information regarding its business practices, omissions that could lead to material risks for future investors and national security issues as it begins trading, the letter said.

According to Ocasio-Cortez, one such partial omission was the funding it received from In-Q-Tel, the CIA’s venture-capital arm. A 2009 shareholder report from Palantir revealed that In-Q-Tel held a 10% share in Palantir, but the firm’s 2020 S-1 filing did not say whether that investment was still in play or how many Palantir shares In-Q-Tel held. Palantir is listed as one of In-Q-Tel’s portfolio companies on the venture group’s website.

Palantir’s contracts with foreign governments were also cited, some of which involve governments “known to engage in corrupt practices and human rights violations,” such as Qatar, Ocasio-Cortez wrote in the letter.

Palantir’s domestic contracts have also drawn criticism. Its contract with US Immigration and Customs Enforcement came under scrutiny from 15 members of the Congressional Hispanic Caucus, who questioned whether Palantir was sharing people’s health data with ICE. Data privacy was another concern in Ocasio-Cortez’s letter to the SEC.

Palantir has denied that it shares data between the different federal agencies. A spokesperson for the Department of Health and Human Services has also denied that the data was being shared.

Ocasio-Cortez also said there was a lack of transparency regarding Palantir’s board member Alexander Moore and its corporate-governance oversight concerning a personal $25.9 million loan made by cofounder Stephen Cohen. The congresswoman also questioned the firm’s motive behind identifying as an “emerging growth company,” a move that  she said allowed it to withhold certain information from its S-1 filing. Palantir did not immediately respond to Business Insider’s request for comment.

The letter is another example of the public’s scrutiny of Palantir as the company makes an anticipated debut on the stock market. The startup was founded in 2003 and has cemented itself in Silicon Valley fame for achieving the coveted unicorn status, or Valley speak for privately held companies that are valued over $1 billion. But Palantir’s controversial cofounder Peter Thiel and its lack of transparency have also led to heightened attention on the firm.

Palantir began trading on the New York Stock Exchange Wednesday at $10 a share and is valued at $17 billion.

Read Ocasio-Cortez’s letter below:

Disclosure: Palantir Technologies CEO Alexander Karp is a member of Axel Springer’s shareholder committee. Axel Springer owns Insider Inc, Business Insider’s parent company.

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