Dynamo Recoveries Limited v Alexander Nix [2024] EWHC 3116 (Comm)

“We decided that an investment would be potentially profitable because we felt there was a niche in the market for a provider of data analytics services that was not hostile to Republican or conservative points of view.”

“30. On 30 November 2017 [6 – 8] (I have reviewed the email to refresh my memory of the date) Theepa sent me a substantially revised version of the profit and loss forecast that I had not previously seen (the “30 November Forecast”). As I recall I expressed surprise to Theepa that Alexander had not involved me in this process and she agreed that it seemed a bit strange. The 30 November Forecast contained forecast profits for 2018 had increased dramatically. Having reviewed that document to refresh my memory I see that it predicted profits before tax in 2018 of £7,453,088. … 33. In the course of preparing this witness evidence I have also had my attention drawn to a second profit and loss forecast with the date of 30 November 2017, contained within the same Excel file as the 30 November Forecast (the “Second 30 November Forecast”). The Second 30 November Forecast is identical in content to the 30 November Forecast. However, the Second 30 November Forecast gives a higher cost for “Research / Commission” and, in view of that higher cost, predicts lower profits of £2,545,000. Looking at these two forecasts now, I suspect it was the Second 30 November Forecast that was more plausible, as I think the 30 November Forecast probably was too optimistic as to the likely direct costs. To the best of my recollection I was not aware of the contents of the Second 30 November Forecast when I communicated the summary of the 30 November Forecast to the investors as described in the paragraph above, or if I was, I must have been led by Alexander or Theepa to think that the 30 November Forecast was the more plausible forecast of direct costs, and therefore profits. I do not see how I possibly can have been aware of the Second 30 November Forecast as a credible forecast, since I was uneasy enough about sending any forecasts at all, and I certainly would not have sent what I did in the terms I did if I had known that there was another credible forecast of the same date that predicted much lower profits.”

“A. As I have already said, I think I was confused. It was a long time ago. There were a lot of versions. I think version 7 was the one that I hadn't seen before. Version 8 was an iteration on from it, and it had a much larger profit in there. Q. Mr Wheatland, the point you are making in this paragraph is that you received a forecast after a period when Mr Nix was allegedly involved in it, and you were then surprised to see the profits had increased dramatically? That is the point you are making at least in the witness statement, isn't it? A. Yes, and I think that's right, because the revenue forecast that went into the version 7, which, when corrected, became version 8, although there was still an underlying error in there, which I didn't know about at the time, did cause for a forecast that showed a dramatic increase in profit. Q. Mr Wheatland, if you were talking about the 29 November one, you can't have been surprised about a dramatic increase in profits in version 7 because it had gone down. The only thing you can be talking about as having surprised you by going up is version 8, isn't it? A. Well, I reviewed version 7. I had suggested some changes where I could see that some things were wrong. I didn't do the calculation. Theepa turned it around, and this was the forecast that resulted from that. Q. Mr Wheatland, in this paragraph, you were trying to make it look as if the 30 November forecast was Mr Nix's increase that surprised you, and the truth is it didn't surprise you, because you had brought about the change. Isn't that right? A. No, I don't accept that. I have told you exactly what I think. Pretty clearly I think. You can ask me again and again, but the version 7 was the one, after I hadn't seen for a long time, where there had been a significant increase in profit. I didn't do the calculation. I reviewed the cost. The research commission looked incorrect. It turns out that, actually, part of the reason that the revenue had increased dramatically was because gross revenue had been taken as net revenue and the media cost hadn't been sufficiently allowed for. I can't say it any clearer than that. Q. Let's try again, Mr Wheatland. Your answer just now was: "You can ask me again and again, but the version 7 was the one, after I hadn't seen it for a long time ..." And then it's not on the [draft] transcript, but something, something, "an increase in profit". But it wasn't an increase in version 7, Mr Wheatland. This is what I've just shown you. That one came down – A. That was an increase in revenue. You are correct. It was an increase in revenue. That one didn't jar at me. I spotted that there was something wrong with the research commission costs. I didn't know what else was wrong. But I didn't look at the bottom line and predict what would be the result of that; I just asked Theepa to correct something which was wrong. And then I received the version 8, where, as you and I both can see, there was a big increase in profit, an erroneous increase in profit, as it happens. Q. Mr Wheatland, you weren't surprised by the 30 November forecast, because you had brought about that change and this paragraph isn't true, is it? A. The only thing wrong with this paragraph is that I got confused between version 7 and version 8. Q. This also means, Mr Wheatland, does it not, that you can't possibly have expressed surprise to Theepa about version 8, can you, because you had produced it with her? A. Well, I think I did express surprise when I saw the profit level. But actually, my surprise was at the jump in revenue that was now being projected. So I was surprised at that.”

“Q. Let's read on: "... if I was ..." If you were aware of version 7, and I will read from your witness statement: "... I must have been led by Alexander or Theepa to think that the 30 November Forecast [version 8] was the more plausible forecast of direct costs, and therefore profits." That is not true, is it? A. No, I think it is true actually, because this is all based on the revenue projections. So I remember challenging the revenue projections, being told that they were right; and based on those revenue projections, that would have been the performance of the business. But the revenue projections, as I have said, some of them were overinflated, because they included the media costs which should have been taken out on that media costs line. So if those revenue projections had been right, then that forecast would have been right. As it turned out, they weren't. Q. But you didn't know that at the time? A. I did not know that at the time. Q. So at the time it cannot possibly have been Alexander or Theepa who led you to think that version 8 was the more plausible forecast; you had proposed the change that created version 8. A. No. What – Q. We have literally just looked at that, Mr Wheatland. A. Yes, shall I finish? The thing that caused that inflated profit was the high level of revenue that was at the top of the page. And that is what Alexander and/or Theepa assured me was correct. I'm going to be honest with you, I think they thought it was correct at the time, because I don't think they had spotted that gross revenue and net revenue had been confused in a couple of the lines of business. But if that revenue had been correct, as assured to me by Alexander/Theepa, then that forecast would have been correct. It turned out that was wrong. Q. They didn't assure you about the revenue, Mr Wheatland. That's nowhere in your statement, is it? A.Well, I think I challenged whether or not that was quite right, and I think there is an email between me and Alexander asking whether or not he really wanted to be that bullish with the forecast. Q. When is this assurance that you have just mentioned? When was that given? A. I think it was given verbally. Q. But you had forgotten about that when you did your witness statement? A. When I did this witness statement, I hadn't recalled or put together, if you like, put together -- I knew that there was a time when we had misforecast because we had forecasted gross revenue rather than net revenue, but I didn't know when that was in the timeline. The research cost was clearly wrong in version 7, so corrected that. The increased level of profitability resulting from that drove directly from the increased level of revenue being projected. And – Q. So you are both wrong. A. And whilst I challenged it, I was told it was right. It turned out to be wrong, through an error. Q. Mr Wheatland, there was no challenge and there was no assurance, or you would have mentioned them in your witness statement. Is that right? A. No, it’s not.”

“I was not really involved with coordinating the way Cambridge Analytica responded to the ICO. Instead, Alex Tayler took the lead. That was partly because it was to do with data, which was Alex’s particular area, but it was also because I was living in the USA at that time. I am sure that Alex Tayler would have coordinated the response with Alexander Nix. This was new territory for Alex Tayler and I cannot imagine he would have proceeded on his own without referring to someone more senior. Additionally, Alex Tayler and Alexander Nix were very close at that time.”

“I agree, this letter is good. Please note that Chris Wylie was a contractor on a 1 year fixed term contract (which he failed to turn up for at the end of the year), not an employee.”

“Julian, I have not heard from anyone further. Do you wish me to proceed and send the letter to the ICO or wait for confirmation from anyone else? I am inclined not to send anything until I hear from Philip given he would likely be resisting the warrant application if we get to that stage. Provided he is able to respond first thing in the morning I cannot see any material difference in sending the letter now and then.”

“Tim, Agreed. Please hold for Philip to comment first thing in the morning and then send the letter directly after that.”

“…AsI have mentioned above, the Information Commissioner herself appeared on the Channel 4 broadcast and gave an interview. During that interview she said that Facebook hadcooperated with the ICO’s investigations. That fact, and the contents of the Channel 4 broadcast, lead me to believe that Facebook also received notice of the Channel 4 broadcast in advance, and in light of that notice chose to terminate Cambridge Analytica’s accounts. I cannot even begin to think of any other reason why Facebook would suspend all accounts with anything to do with Cambridge Analytica suddenly at that time.”

“A. The "suddenly at that time" is the – is the key part of that sentence for me, because this thing -- Facebook knew we had Facebook data. We had discussed with them. We'd certified it was deleted. There had arisen a question that the data was still in existence somewhere. We were in discussion with them in order to reconfirm that the Facebook data was deleted. So, in that sense, the Facebook data wasn't a new thing at that time. What was a new thing at that time was the Channel 4 broadcast.”

“Breaking the Rules Leads to Suspension Several days ago, we received reports that, contrary to the certifications we were given, not all data was deleted. We are moving aggressively to determine the accuracy of these claims. If true, this is another unacceptable violation of trust and the commitments they made. We are suspending SCL/Cambridge Analytica, Wylie and Kogan from Facebook, pending further information.”

“Q. Mr Wheatland, the truth is there is no evidence at all and no reason to think that this had anything to do with Mr Nix's comments, is there? A. Well, I think it did, so I disagree with you. Q. The reason why – the reason why Facebook suspended the business is perfectly obvious. It was publicly announced, and it is the GSR data, isn’t it? A. I think it was triggered by the Channel 4 interview.”

“A number of significant shortcomings in Mr Nix’s disclosure have emerged since the beginning of 2024. These shortcomings include strong prima facie evidence of deliberate destruction of evidence by Mr Nix, and so could hardly be more serious.”

“The Court will have apprehended that the Claimants did not cross examine, as foreshadowed, on the [disclosure shortcomings]. In the end there was insufficient time to explore these issues and furthermore, as a result of the live evidence given by Mr Nix, it was not necessary to do so.”

“As a director of each of the [SCL] Companies, Mr Nix owed the statutory duties set out at sections 171 – 177 of the Companies Act 2006 (and further or alternatively fiduciary duties of the same substance as those statutory duties). These included a duty to promote the success of the [SCL] Companies and a duty to exercise reasonable skill, care and diligence.”

“When the assertion of a director is so disreputable and so beyond the pale, the Court is not bound to accept that the director held that belief, all the more so when the assertion of that belief is justified by the reliance only on the alleged but obviously inadequate belief that winning the business was the only prize.”

“120. The duty imposed on directors to act bona fide in the interests of the company is a subjective one (see Palmer's Company Law (Sweet & Maxwell), para. 8.508). The question is not whether, viewed objectively by the Court, the particular act or omission which is challenged was in fact in the interests of the company; still less is the question whether the Court, had it been in the position of the director at the relevant time, might have acted differently. Rather, the question is whether the director honestly believed that his act or omission was in the interests of the company. The issue is as to the director's state of mind. No doubt, where it is clear that the act or omission under challenge resulted in substantial detriment to the company, the director will have a harder task persuading the Court that he honestly believed it to be in the company's interest; but that does not detract from the subjective nature of the test.”

“28. Although it is now said that these specific duties flow from what is said to be the logical consequence of the Board’s acceptance that climate risk is a serious risk to Shell’s business, rather than being a duty to which all directors of companies such as Shell are subject, I still think that their formulation is inconsistent with the well-established principle that it is for directors themselves to determine (acting in good faith) how best to promote the success of a company for the benefit of its members as a whole. This duty continues on an ongoing basis throughout the period of time for which directors hold office and has always been the law (e g Re Smith & Fawcett Ltd [1942] 1 All ER 542 at 543, [1942] Ch 304 at 306 per Lord Greene MR). It is unaffected by the codification of the duty in s 172. It is an important principle because, as Lewison J observed in Lesini at [85]: ‘The weighing of all these considerations [as set out in s.172] is essentially a commercial decision, which the Court is ill-equipped to take, except in a clear case.’ [29.] It is well established that the test for breach of s 172 is a subjective one (e g Regentcrest plc (in liq) v Cohen [2001] 2 BCLC 80 at [120] per Jonathan Parker J) and requires proof of conduct other than in good faith. As Jonathan Parker J explained, there will be cases in which an absence of good faith can be inferred from the irrational nature of the conduct in issue, but it remains the case that the state of mind of the director concerned is what matters. For these purposes, good faith, not irrationality, is the cornerstone and an honest but unreasonable and mistaken belief that a particular course of action is in the company’s best interests is not sufficient to amount to a breach of s 172.”

“[87.] It is trite law that a director owes to his company a fiduciary duty to exercise his powers (i) in what he (not the Court) honestly believes to be the company’s best interests, and (ii) for the proper purposes for which those powers have been conferred on him. Mere incompetence is not a breach of fiduciary duty: it might give rise to a claim for breach of a tortious or contractual duty of care, but the claim in this case was based entirely on alleged breaches of fiduciary duty. [88.] The claimants sought to argue that a director is also in breach of his fiduciary duty if he honestly, but unreasonably and mistakenly, believes that he is pursuing the company’s best interests. This argument was founded on a single remark of Richard Field QC (sitting as a deputy High Court judge) in Re Pantone 485 Ltd [2002] 1 BCLC 266 at para [46]. In that passage, the judge observed that it was not a breach of fiduciary duty for a director of company A to advance monies for the benefit of a related company B, if the director ‘honestly and reasonably’ believed that company B would repay the monies so advanced. On the basis of this formulation, Mr Nicholls submitted that it would be a breach of fiduciary duty if the director’s belief, albeit honestly held, had no reasonable basis in fact. He submitted that, if the law were otherwise, a director would be immune to suit for crass incompetence: in other words, his fiduciary duties would be less demanding that any common law duty of care. [89.] I reject that proposition. Fiduciary duties are not less onerous than the common law duty of care: they are of a different quality. Fiduciary duties are concerned with concepts of honesty and loyalty, not with competence. In my view, the law draws a clear distinction between fiduciary duties and other duties that may be owed by a person in a fiduciary position. A fiduciary may also owe tortious and contractual duties to the cestui que trust: but that does not mean that those duties are fiduciary duties. Bearing all that in mind, I find nothing surprising in the proposition that crass incompetence might give rise to a claim for breach of a duty of care, or for breach of contract, but not for a breach of fiduciary duty.” [90.] Furthermore, I do not consider that the judge's remarks in Pantone 485 can support the proposition for which Mr Nicholls relies on them. What the judge was dealing with was a question of onus — namely, whether a claimant in such a situation has to prove that the money has not been repaid by company B, or whether the director has to prove that the money has been repaid. In my view, the judge was not seeking to address any fundamental question of substance as to the scope of a director's fiduciary duty — namely, whether he is in breach of that duty if he acts on an honest, but unreasonable and mistaken, view. In any event, if (contrary to my understanding) that is what the Judge was saying, then he was flying in the face of a clear line of binding authority running from Smith v. Fawcett [1942] 1 Ch 304 at 306, through Bristol & West Building Society v. Mothew [1998] Ch 1 at 18, to Regentcrest plc [2001] 2 BCLC 81 at l05a–h. Those cases make it perfectly clear that a director's duty is to do what he honestly believes to be in the company's best interests. The fact that his alleged belief was unreasonable may provide evidence that it was not in fact honestly held at the time: but if, having considered all the evidence, it appears that the director did honestly believe that he was acting in the best interests of the company, then he is not in breach of his fiduciary duty merely because that belief appears to the trial judge to be unreasonable, or because his actions happen, in the event, to cause injury to the company.”

“(1) A director of a company must exercise reasonable care, skill and diligence. (2) This means the care, skill and diligence that would be exercised by a reasonably diligent person with – (a) the general knowledge, skill and experience that may reasonably be expected of a person carrying out the functions carried out by the director in relation to the company, and; (b) the general knowledge, skill and experience that the director has.”

“Liability is for negligence, not mere errors of judgment, or imprudence.”

“Mr Nix breached one or both of the duties particularised in the paragraph above in the following ways: 47.1. By making the comments he made at the Meeting. Insofar as those comments reflected the way in which Cambridge Analytica had genuinely conducted its business, it was a breach of Mr Nix’s duties to have conducted the business in that way, and further or alternatively to refer to that fact at the Meeting. Insofar as Mr Nix’s comments did not genuinely reflect the way in which Cambridge Analytica conducted its business, but rather were remarks made in the hope of winning business for Cambridge Analytica, Mr Nix breached his duties by stating (even if untruthfully) that Cambridge Analytica had in the past engaged, and was prepared in the future to engage, in disreputable and unethical practices, which would lower Cambridge Analytica in the estimation of any right-thinking person. 47.2. Further or in the alternative, by causing or permitting Elections to conduct itself in its dealings with the ICO in March 2018 in a way that was unreasonable and/or uncooperative, even though the Information Commissioner warned Mr Nix of the adverse publicity implications of doing so.”

“In the course of the Meeting, Mr Nix made comments to the effect that Cambridge Analytica had in the past, and/or would in the future be prepared to: 19.1. entrap a political opponent into accepting a corrupt business deal, with a view to filming that exchange and broadcasting it on the internet; 19.2. send prostitutes to a political opponent’s home with a view to generating incriminating photographs or footage; and 19.3. take steps to generate false allegations that would be accepted as true by the electorate, saying at one stage: “I mean, it sounds a dreadful thing to say, but these are things that don’t necessarily need to be true as long as they’re believed.”

“… the following is relevant (with dotted lines inserted where it is not clear from the broadcast whether the passages followed directly): “Reporter: What we want to know is what is the expertise of the deep digging that you can do to make sure that the people know the true identity and secrets of these people? Mr Nix: Oh, we do a lot more than that. I mean, deep digging is interesting, but, you know, equally effective can be just to go and speak to the incumbents and to offer them a deal that’s too good to be true and make sure that’s video recorded, you know, these sorts of tactics are very effective; instantly having video evidence of corruption, putting it on the internet, these sorts of things. Reporter: And the operative you will use for this is who? Mr Nix: Well, someone known to us. Reporter: Okay, so it is somebody – you won’t use a Sri Lankan person, no because- Mr Nix: No, no we’ll have a wealthy developer come in, somebody posing as a wealthy developer. Mr Turnbull: I am a master of disguise. [laughter] Mr Nix: Yes, they will offer a large amount of money to the candidate, to finance his campaign in exchange for land, for instance, we’ll have the whole thing recorded on cameras, we’ll blank out the face of our guy and then post it on the internet.” … “Mr Nix: Send some girls around to the candidate’s house. We have lots of history of things.” … “Reporter: For example you are saying, when you are using the girls to introduce to the local fellow, and you’re using the girls for this, like the seduction, they're not local girls? Not Sri Lankan girls? Mr Nix: I wouldn’t have thought so, no, we’ll bring some – I mean, that was just an idea, just saying we could bring some Ukrainians in on holiday with us, you know, you know what I’m saying. Reporter: They are very beautiful Ukrainian girls. Mr Nix: They are very beautiful, I find that works very well.” … “Mr Nix: Please don’t pay too much attention to what I’m saying because I’m just giving you examples of what can be done, and what, what has been done.” … “Mr Nix: I mean, it sounds a dreadful thing to say, but these are things that don’t necessarily need to be true as long as they’re believed.”

“… The admissions were filmed at a series of meetings at London hotels over four months, between November 2017 and January 2018, where an undercover reporter for Channel 4 News posed as a fixer for a wealthy client hoping to get candidates elected in Sri Lanka. Along with Mr Nix, the meetings also included Mark Turnbull, the managing director of CA Political Global, and the company's chief data officer, Dr Alex Tayler…The meetings with an undercover reporter for Channel 4 News were held on: November 2017, Hari Hotel - Mark Turnbull and Alex Tayler November 2017, Dorchester Hotel - Mark Turnbull and Alex Tayler December 2017, Berkeley Hotel - Mark Turnbull January 2018, Berkeley Hotel - Alexander Nix and Mark Turnbull December 2018, phone call with Alexander Nix and Mark Turnbull…”

“146. The meeting commenced with pleasantries and a recap of the prior discussions between Mr Turnbull and Dr Tayler about the project. Champagne glasses were repeatedly refilled during this exchange, which was less about business and more about a bonding and small talk and 'socialising the deal' that had been discussed and agreed at the previous meetings. However, the conversation took an unexpected turn when Mr Ratwatte unexpectedly disclosed his interest to entrap rival politicians using controversial methods such as honeytraps. This revelation introduced a surreal and somewhat comical element to the discussion. 147. Neither Mr Turnbull nor I were prepared for this change of tack, and I remember exchanging bemused glances with Mr Turnbull during this turn of events. I did not take the conversation seriously, and I believe Mr Turnbull shared this sentiment. Mr Ratwatte continued to inquire about methods to entrap politicians, and we responded by providing hypothetical responses to his questions and 'playing along' with his inquiries. My comments to Mr Ratwatte were improvised and somewhat tongue-in-cheek to address hypothetical queries posed by the undercover reporter. 148. At no point in the conversation did I offer (genuinely or in jest) to carry out any of these services for Mr Ratwatte. Moreover, the discussion between Mr Turnbull and me and the reporter did not constitute a formal sales meeting. The parameters of the work to be undertaken by Cambridge Analytica had already been discussed and agreed upon in three previous meetings, as I had been told by Mr Turnbull. I knew that certain proposals had been shared with the clients, but at the time, I had been given a high-level summary of these objectives verbally by Mr Turnbull. It is also very possible that I was shown the historic presentation that was shared with the client in the previous meeting that set out our proposed service offering, however, I cannot remember. 149. When Mr Ratwatte unexpectedly redirected the conversation towards exposing corrupt politicians instead of concluding the discussion, Mr Turnbull and I indulged the supposed client by addressing his inquiries about potential actions to reveal such politicians. However, both Mr Turnbull and I explicitly emphasised that our responses were hypothetical. We made it clear in a very awkward conversation that the business was not involved in fake news, lying or entrapment, and that we disapproved of such practices. Specifically, in a previous meeting with Mr Ratwatte that was also aired on C4, Mr Turnbull had made it expressly clear that we were not in the business of fake news or making stuff up. In the meeting, when addressing some of the awkward questions that Mr Ratwatte posed in respect of how it might be possible to entrap a politician, I made it clear that the answers were hypothetical. 150. At no time in any of the meetings between C4 and me or any other Cambridge Analytica staff did any of us offer to undertake any of the "services" that Mr Ratwatte was inquiring about. He was asking a series of very probing and difficult questions about illegal and/or unethical practices and we were answering them as best we could without offending or alienating a prospective client.”

“Reporter: “It has to be the deep digging and what we want to know is what is the expertise of the deep digging that you can do to make sure that the people know the true identity and secrets of the people? Nix: "Oh, we do a lot more than that. I mean deep digging is interesting but you know equally effective can be just to go and speak to the incumbents and to offer them a deal that's too good to be true, and make sure that that's video recorded, you know, these sorts of tactics are very effective instantly having video evidence of corruption, putting it on the internet, these sorts of things.”

“It is hard to see how fabricated claims to offer services that any right-thinking person would consider ethically unacceptable (if not illegal) could comprise a good faith attempt to promote the success of the Companies, or could be consistent with the conduct of a reasonably diligent and competent director.”

“Nix: “They are very beautiful, I find that works very well.” … Nix: “And the answers are hypothetical and that's really important is, is please don't pay too much attention to what I'm saying because I'm just giving you examples of what can be done and what, what has been done. The right solution will be made for the right, for your problem”.”

“They are very beautiful, I find that works very well. Please don't pay too much attention to what I'm saying because I'm just give you examples of what can be done, and what has been done.”

“we do a lot more than that”

“Well, someone known to us.”

“Hypothetically speaking, I guess you could send some girls around”

“I mean it was just an idea” but he also made the observation that: “[Ukrainian girls] are very beautiful, I find that works very well.”

“When Mr Ratwatte unexpectedly redirected the conversation towards exposing corrupt politicians instead of concluding the discussion, Mr Turnbull and I indulged the supposed client by addressing his inquiries about potential actions to reveal such politicians. However, both Mr Turnbull and I explicitly emphasised that our responses were hypothetical.”

“And the answers are hypothetical and that's really important is, is please don't pay too much attention to what I'm saying because I'm just giving you examples of what can be done and what, what has been done. The right solution will be made for the right, for your problem.”

“It is his considerations which must be in good faith and that means – for most purposes, that means honest. So he must honestly consider taking into account all of the relevant factors.”

“A. Was I aware of my obligations as a director? Q. You can express it that way if you wish. A. Not front of mind, but in back of mind. Q. I would imagine, with the greatest respect, Mr Nix, that as the CEO of the most influential data company in the world, you would be aware of your obligations as a director every day you went to work? A. Indeed. But I think the point that I'm making is that I was focused on the purpose of the meeting, which was to represent the best interests of the company through delivering on the objective, which was to close the business that we were asked to -- I was asked to help close by Mr Turnbull. Q. So the most important objective that you had in your mind, was it, was not the reputation of the company or anything of that kind, or any risk that you might put the company to, but just to close that deal? A. No, that is twisting my words. I'm simply suggesting that it was also a factor, alongside the reputation and the other things that you have pointed out. Q. Yes. And I'm suggesting to you, and I hope you would agree with me, that you had all of those objectives in your mind when you went to that meeting, because that is what you would have in your mind whenever you went to a meeting? … Q. I'm suggesting to you, and I hope you will agree with me, that you had all of those objectives in mind when you went to that meeting; do you agree? A. I think that is fair.”

“The question is not whether, viewed objectively by the Court, the particular act or omission which is challenged was in fact in the interests of the company; still less is the question whether the Court, had it been in the position of the director at the relevant time, might have acted differently. Rather, the question is whether the director honestly believed that his act or omission was in the interests of the company. The issue is as to the director's state of mind. No doubt, where it is clear that the act or omission under challenge resulted in substantial detriment to the company, the director will have a harder task persuading the Court that he honestly believed it to be in the company's interest; but that does not detract from the subjective nature of the test.”

“25. Mr Nix regarded this communication [7 March Letter], not as part of a reasonable and good faith investigation by the ICO, but as suggestive of a pre-determined course on which the ICO was determined because of bias against him and Cambridge Analytica. This irrational and incorrect belief informed a subsequent needlessly uncooperative approach to dealings with the ICO. 26. On 14 March 2018 Elections responded to the ICO’s letter (in the person of Stephen Wilkinson, described as Elections’s “Data Compliance Officer”). Elections’s strategy, as ultimately determined and approved by Mr Nix, was to offer to cooperate in respect of the documents, but not to engage at all with the request for access (presumably in the hope that the ICO would not pursue the request for access so long as there was sufficient cooperation in respect of the documents) … 27. This cooperative approach appeared initially to find favour with the ICO … 28. Subsequently Elections, at Mr Nix’s behest or with his approval, altered its position on disclosure, taking the decision that it would not provide disclosure to the ICO as quickly as had been suggested after all, but rather would be less cooperative, and would only provide documents within 14 days … … 30. It was therefore Elections’s change in position about when the documents would be disclosed that led the ICO renewing its demand for access, which otherwise it had apparently been willing not to pursue. 31. On 18 March 2020 the Information Commissioner wrote to Mr Nix (at Elections and “via”

“… was not involved in making any strategy decisions, for the simple reason that the expert team were simply much more competent than me in this regard and as such I was copied in on some correspondence with the ICO but not all …”

“Thank you for your letter of 24 November 2017 in response to the Information Notice served on Cambridge Analytica. The information you have provided to date has been helpful however we now require further clarification and it is hoped that you will cooperate with our request without the need for a further Information Notice. 1. You have previously referred to working on three UK election campaigns over the past 15 years. Please confirm which UK election campaigns were worked on. 2. We understand that in relation to the three UK election campaigns SCL worked on, none of them involved the processing of personal data. Please describe SCL's role in each of the campaigns and what data SCL had access to. 3. You explain that the goal of the personality quiz is to profile personality profiles over time. Does this mean that anyone who fills out the survey is either added to your data base or is linked to an existing profile in your data base? Further, do you provide fair processing information to those who use the 'Login with Facebook' widget or sign-in without the Facebook widget? If so, explain. 4. We understand that in the past you have pulled data such as the content of tweets from the main Twitter APL Although this data is publicly available, the ICO could still regard it as personal data. a. Please explain how this data is pulled from Twitter. b. Was any fair processing information provided? 5. In February 2016, Cambridge Analytica's CEO, Alexander Nix, told Campaign magazine: "Recently, Cambridge Analytica has teamed up with Leave.EU - the UK's largest group advocating for a British exit (or 'Brexit') from the European Union - to help them better understand and communicate with UK voters. We have already helped supercharge Leave.EU's social media campaign by ensuring the right messages are getting to the right voters online and the campaign's Facebook page is growing in support to the tune of about 3,000 people per day ." Please explain this comment and, in particular, how did Cambridge Analytica help supercharge Leave.EU's campaign by ensuring the right messages are getting to the right voters online? 6. Can you please confirm whether Julian Wheatland, (who we understand is, or was, Analytica's Chief Financial Officer), or any other Cambridge Analytica employee or employees, whether or not still employed by Cambridge Analytica met with members of the UKIP data team between 2 November 2015 and 19 November 2015? If so, was data shared at any meeting or meetings or subsequently, and if so what kind of data and for what purpose was it shared? 7. We understand that Cambridge Analytica created models in the United States which are evaluative assessments created to guess individuals political preference relying on data held in relation to a particular individual. As this data is processed in the UK, please advise us of the following; a. Please provide specific details in relation to how the rankings are determined within the model. b. What personal data is used to determine the rankings? c. What data is used in the creation of such models? Please confirm the sources of any data Please provide the requested information as soon as possible and in any event by 19 February 2018.”

“Q. So you could have responded to this letter and said, "We have given you all the proof, if you want to come and look for the proof yourself, you are very welcome to do so. We carried out an audit. There is no GSR data at all. If you want to come and look, and prove it for yourself, please do.” … A. That is not what they are asking for, is it? Even in this simple letter, what they are asking for is: "All correspondence, emails, records of 16 communications and meetings (and any other associated material) between SCL Elections ... and [GSR] ... "Documents, or other materials ..." So what they are asking for is a digital footprint of everything that has happened between GSR and the company from the day we met them through to the day of this letter.”

“…I also think your letter is excellent, but having discussed the matter with Alex Tayler, we think that it might be better not to volunteer quite so much information at this initial stage and at least until we understand more about the exact nature of their enquiry. He has offered to amend your letter, and we should have an updated draft tomorrow COB.”

“My concern about your letter is that we're too quick to volunteer our emails to them. I have slightly changed your letter below to instead suggest we send them only relevant material with a cover letter. This at least allows us to control the narrative about our interaction with GSR...”

“Though less forthcoming, it should be sufficient to stave off an application for a warrant.”

“SCL Elections Ltd is committed to helping the ICO with its investigations. Point (3) is the easiest to answer: I can confirm that SCL Elections Ltd does not hold any data obtained from Global Science Research or any derivatives thereof. Points (1) and (2) are likely more time-consuming since these demands are not time- limited, do not limit themselves to individuals within either SCL Elections Limited or Global Science Research Limited, do not limit themselves to any particular subject, and do not limit themselves to a particular medium of recording. Thus, the demands have cast the net very widely indeed. I will have a better idea of how great the burden is on the company once we get into retrieving the material, and I may want to come back to you on this.”

“In order to make you a faster (and likely more useful reply), I will in the next few days set out in a letter to you the interactions between SCL Elections Ltd and Global Science Research. If you wish, I can supply you with the most relevant emails between the parties together with copies of the signed agreements… In this way you may find that you can cast any request for data with more specificity than the dragnet terms currently proposed, and that this will not impair the requirements of your investigation. Please let me know if you would like to follow this route (which is mutually advantageous) and I will prepare these materials for you.”

“The ICO have responded to our letter regarding the 'Demand for Access' notice. I'm pleased to say the ICO should not be in attendance today although there is a request for clarification as well as information relating to the penultimate paragraph, the timeline for submission of this information is vague as it indicates 'a few days'. We should respond to Ms Poole's email clarifying her request and proposing a definitive date for the submission of information.”

“You can write back to her and say that no parent, subsidiary or affiliate companies of SCL Elections Ltd hold data obtained from Global Science Research. I think the end of next week is probably a reasonable amount of time to get the material together, but we will need to have it reviewed by Matt. Perhaps we should say two weeks? There's no reason we should be rushed by them, they take months to come back to us following each communication.”

“…We can confirm that no parent, subsidiary or affiliate companies of SCL Elections Ltd hold data obtained from Global Science Research… SCL will send on documentation referred to in the penultimate paragraph of our letter within two weeks of this email.”

“We write further to… your most recent response by email dated 15 March 2018. In that email you proposed sending documentation, which in your previous letter of 14 March you suggested could be made available within the next few days, within the following 2 weeks (by 29 March). Having reviewed this matter further, we are not satisfied with this response and approach and in particular the timescales proposed.In order to investigate this matter fully and effectively, we reiterate our demand to access the premises of SCL Elections Limited, of which the company was initially given notice on 7 March 2018. We intend to attend the premises of SCL Elections Ltd at 55 New Oxford Street on Wednesday 21 March 2018 at 12 noon in order to enter and search the premises for evidence… We request that written confirmation is given by 4pm on Monday 19 March 2018 as to whether access to the premises on Wednesday 21 March is to be permitted or refused. Please note that in the event that such access is refused our next steps will be to consider making a Court application for a warrant, of which we will give you notice so that the company has the opportunity to be heard on the granting of the same.”

“I write in light of the considerable concerns being expressed publicly about the conduct of Strategic Communications Ltd (SCL) and Cambridge Analytica (CA) in news coverage over the past 48hrs and your statements in responses to those concerns. As you will be aware we are still waiting your provision of Information requested by way of a Demand for Access notice of 7 March. Initially, your staff Indicated that Information could be provided within a timescale of 'the next few days', and we held our initial attendance at your premises. We were then told it would be provided in a timescale of weeks. We have explained this is unacceptable and therefore we intend to attend your premises on Wednesday 21st March to conduct a search under the Demand for Access unless you indicate you will refuse such access or fail to respond to our latest letter, in which case it is our intention to move to list for a hearing for a search warrant under Schedule 9 of the Data Protection Act 1998. My observation, given your comments reported in the media, your press release and in evidence to the Select Committee is that an inspection by the regulator to verify the facts of the situation would be in everyone’s interest at this time… As such I would be happy to expedite our inspection of SCL/CA and would be happy to make arrangements for attendance by a team of auditors and investigations from my office starting as early as Tuesday March 21… Investigations by my office would usually be conducted in private. However, given the scale of interest in this case, my view is that it is likely to be in the public interest that I provide a detailed public update on our investigation. I anticipate that at the very least Parliament’s DCMS Select Committee will seek such an update shortly. The degree of your co-operation (or lack of it) is likely to feature in such an update, and, as provided for in S59(2) of the Data Protection Act 1998, I invite your comments on this to inform my consideration of the public interest test in this case.”

“…By passing information on to a third party, including SCL/Cambridge Analytica and Christopher Wylie of Eunoia Technologies, [Kogan] violated our platform policies. When we learned of this violation in 2015, we removed his app from Facebook and demanded certifications from Kogan and all parties he had given data to that the information had been destroyed. Cambridge Analytica, Kogan and Wylie all certified to us that they destroyed the data. … Several days ago, we received reports that, contrary to the certifications we were given, not all data was deleted. We are moving aggressively to determine the accuracy of these claims. If true, this is another unacceptable violation of trust and the commitments they made. We are suspending SCL/Cambridge Analytica, Wylie and Kogan from Facebook, pending further information.”

“The tone and content of the ICO 16/3/16 letter is very different from that of the ICO 14/3/18 letter and, for that matter, the ICO 7/3/18 letter. The 16/3/18 letter states an intention to visit SCL's premises on 21/3/18. It does not invite discussion or negotiation. The only request made in the letter is for an indication whether SCL will permit that access or not. The sub- text is that if SCL won't permit the ICO in, the ICO will apply for a warrant. I see nothing in the 16/3/18 letter suggesting that the ICO will honour the two-week deadline. That new posture has been reiterated in the 18/3/18 letter (which has suggested an even earlier date – “Tuesday March 21” should, I think, read “Tuesday March 20”.”

“…It is clear from this correspondence that our client has always been willing to assist the ICO in respect of this matter and that this is consistent with all of the numerous interactions our client has had with the ICO over the last 12 months. …Retrieving requested information will require a substantial diversion of resources for our client and Is for that reason that a delivery date of 29 March was proposed. In light of the apparent urgency of the matter from the ICO's perspective, our client Is prepared to redeploy its resources in order to retrieve the requested documents as quickly as possible. Should the timescales proposed genuinely be the cause for concern then our client will provide the information requested by no later than 5pm on Wednesday 21 March 2018. As this was acceptable to Ms. Poole previously we trust this will assuage any concerns you may have about our client's willingness to assist the ICO's investigations and that there will be no need for the ICO to attend our client's premises. … Should you still feel it necessary to make a public statement, in respect of which all of our client's rights are reserved, then we ask that you make clear that our client has always cooperated with the ICO and assisted with its investigations, including inquiries made prior to its latest demand for access, and has offered to provide the requested information voluntarily.”

“I think that we will get somewhere if we tell them all about Chris Wylie and his history with the company and that we are currently undergoing a third-party audit from a respected independent provider to show that we do not have the GSR data, and we will be happy to share that audit with the ICO. In those circumstances there will be no reasonable need for a site visit.”

“The information commissioner just said that CA are being "uncooperative". What possible basis does she have for saying that?”

“… JS - Now by their own admission Cambridge Analytica say that they hide what they are doing, so that's not making your job any easier, do you have the resources? ED - It isn't making our job any easier, on March 7th I issued a demand for access to Cambridge Analytica. They were given until 6pm tonight to respond to it. I'm not accepting their response so therefore I will be applying to the Court for a warrant, I've instructed my office, tomorrow. So we need to get in there, we need to look at the databases and we need to look at the servers and understand how data was processed or deleted by CA, there are a lot of conflicting stories about the data. … JS - When you say you're going in, are you going in tomorrow? ED - We are applying for a warrant tomorrow, we're hoping to be able to go in by Wednesday. … JS - In the position that you hold, are you concerned about the implications for democracy? ED - I am. I think it's a very important moment. Right now we have parliamentarians, we have the media, we have companies, we have the public's attention on voter surveillance. And I think it's critically important that there's trust and confidence of the public in our democratic institutions, and it's a very important time for us to focus on this. JS - And just to clarify, the warrant is for Cambridge Analytica not for Facebook? ED - It's for Cambridge Analytica. Facebook has been cooperative with us and has provided a great deal of information about the profiles, about the 50 million profiles. We're waiting for more information but it's Cambridge Analytica that has been uncooperative with our investigation.”

“May I suggest SPB get a transcript of that interview prepared and get the time of it. Incidentally, the ICO does not have any general "investigative" power, as the ICO might from that interview have one believe. SCL/CA aren't s 41A data controllers. Presumably there has been as 42(1) request for assessment, but the way that such a request for assessment is supposed to be "investigated" is through a s43 information notice (which is given coercive force by s 47 and against which there is a right of appeal under s 48). In short, the "investigation" is a statutorily defined procedure: there is no roving right of investigation. The placement of s 50, which gives effect to Sch 9, rather suggests that the powers of entry+ inspection in Sch 9 are to be exercised consistently with and in support of the procedure in Pt V. I appreciate that it's a TV interview, but it looks a bit like the ICO is dancing to the clamour from certain quarters rather than a sober performance of her statutory functions.”

“I attach an updated draft letter to send to the ICO taking into account the IC's interview with Channel 4 news. In accordance with my discussions with Alexander and Alex, it would seem clear the ICO is determined to seek a warrant and attend CA's premises, as such the letter has been drafted primarily to highlight the unsatisfactory nature of the comments made in the interview and to try and ensure the ICO provides us with sufficient notice prior to any application being heard. We have however also suggested that CA would in principle agree to the ICO conducting an inspection subject to the scope being agreed in advance. Please let me know if you have any comments on the draft - in particular Philip given he is most likely to be referring to the correspondence at the hearing of any warrant application.”

“…By your first letter of this morning, received by us at 07.21, you made two proposals: a. That commission of an audit by Stroz Friedberg, the results of which will be shared with the ICO with the further provision of an affidavit; alternatively b. That your client will allow the ICO access to your client's premises "subject to agreeing the scope of the inspection". You raise "potential" privilege and confidentiality concerns. 7. Your first proposal is not acceptable to us. The Commissioner is carrying out her own investigation and requires access to your client's premises in the course of that investigation. 8. As to your second proposal, the Commissioner does not intend to agree restrictions on the scope of her investigation. The Commissioner's powers are set out in Schedule 9 paragraph 1(3) DPA, and the Commissioner reserves the right to exercise those powers fully in the course of her investigation. Your client is not entitled to limit the Commissioner's investigation in the manner you suggest. … 10. Next steps: Please confirm by 3pm today that you will allow us access to the premises at 55 New Oxford Street at 12 noon Wednesday 21 March 2018…”

“We write further to our recent correspondence on this issue and note your intention to have the warrant application listed for tomorrow morning. As previously stated, this deprives our client of the reasonable opportunity envisaged by the Act to make informed submissions on why the application should be granted. You have given no explanation as to why it is necessary to proceed with such undue expedition and the only conclusion which can be drawn is that the ICO is responding to public pressure in light of the recent media coverage. That is no basis for trampling over our client's statutory rights. In a final attempt to avoid a hearing tomorrow, our client hereby undertakes not to delete, remove or otherwise interfere with the material requested pending a negotiated settlement of the DPA issues. Please confirm by return that the threat of a Court hearing tomorrow will now be removed whilst these discussions continue.”

“it was … Elections’s change in position about when the documents would be disclosed that led the ICO renewing its demand for access, which otherwise it had apparently been willing not to pursue.”

“In regards to the hearing that I attended last week ... It would appear that the ICO persuaded the DCMS to ask the question they needed answering, such that they could launch an investigation. It feels like the committee hearing was part of a much larger plan .... (that clearly had nothing to do with fake news).”

“A. I don't have the exact timeline in my head, but certainly by the time the media attention ramped up it felt like we were being unfairly persecuted. Yes.”

“It is well established that the test for breach of s 172 is a subjective one (e g Regentcrest plc (in liq) v Cohen [2001] 2 BCLC 80 at [120] per Jonathan Parker J) and requires proof of conduct other than in good faith. As Jonathan Parker J explained, there will be cases in which an absence of good faith can be inferred from the irrational nature of the conduct in issue, but it remains the case that the state of mind of the director concerned is what matters. For these purposes, good faith, not irrationality, is the cornerstone and an honest but unreasonable and mistaken belief that a particular course of action is in the company’s best interests is not sufficient to amount to a breach of s 172.”

“If equitable compensation is available, the loss is measured at the time of the trial and must of course be causally related to the breach, on a “but for” test: i.e. compensation will not be awarded if the loss would have been suffered even if the director had not committed any breach.”

“The first step in establishing causation is to eliminate irrelevant factors, and this is the purpose of the “but for” test. This test asks: would the damage of which the claimant complains have occurred “but for” the negligence (or other wrongdoing) of the defendant? If the damage would have occurred in any event the defendant’s conduct is not a “but for” cause.”

“Neither the absence of the (alleged) comments by Mr Nix from the series of Channel 4 reports, nor a search of Elections’ premises by consent rather than by warrant, nor both of these things together, would have avoided or prevented the failure of the Cambridge Analytica business. The sub-paragraphs to paragraph 37 above, which set out Mr Nix’s position as to the cause of the demise of the business, are repeated.”

“37.1. It is denied that “the Channel 4 broadcast” (which is understood to refer to the second part of the Channel 4 series, containing the comments made by Mr Nix at the Meeting) and the publicity surrounding the execution of the search warrant by the ICO were “disastrous” for “Cambridge Analytica” (as to which paragraph 4.1 above is repeated). The demise of the business cannot be attributed to those two matters, save that Mr Nix admits that the latter (the search and seizure of documents and equipment at Elections’ premises) was damaging and contributed significantly to what occurred. 37.2. On the contrary, the causes of the demise of “Cambridge Analytica” were complex and multi- faceted, but were in summary: (i) Cambridge Analytica’s association (through GSR) with the Facebook privacy and data collection controversies; (ii) media reports (at least initially in The Guardian and the Observer and The New York Times) of allegations made by Christopher Wylie and alleged links between Cambridge Analytica and ‘Brexit’ and Russian involvement in western democratic processes; (iii) the ICO’s investigation and the search and seizure of Elections’ premises and equipment, and the practical impact this had on the ability to operate the business thereafter; (iv) wider controversies about President Trump and ‘Brexit’; and (v) wider public controversy and debate about the use of data in political campaigns more generally.”

“62. The position would have been very different if Alexander had not so disastrously undermined Cambridge Analytica with the comments he had made that were broadcast. Had the brand not been destroyed in that way, we would have been willing to keep funding Cambridge Analytica so that it could survive even if it had been unable to survive on its own trading profits. We would have continued to fund it at least until the US government revenue work stream was up and running. We had not committed US$22m in cash, plus the benefit of CA LLC's promissory note, to the business, only to let it fail at least before the strategy had played out and the US government business had been up and running for quite some time (and the work had not even started in March 2018). Even leaving aside our hopes for Cambridge Analytica's future profitability, as I have said above, it was appealing to us to have access to a political data consultancy firm that was not hostile to the Republican party. Given Cambridge Analytica's successes in the 2016 presidential election, I do not think it is remotely possible that we would have allowed Cambridge Analytica to fail financially before at least the presidential election in November 2020, and not even then so long as it continued to provide its political services well. In any event, by the time of the 2020 election I feel confident it would not have failed anyway, but would have been very profitable, had it not been for the events of March 2018.”

“…It appears to be common ground that the Companies would have required an injection of external funding to survive 2018 (and it is certainly Mr Nix’s case that they would have done so in light of the allegations of data misuse in the media). Ms Mercer has given the clearest evidence that her family was ready to provide that funding, even in an environment of adverse media coverage (as it had in the past). The Mercers were not prepared, however, to provide funding in circumstances where Mr Nix had committed what they considered to be actual wrongdoing (as they considered the comments at the Meeting to be), thereby toxifying the brand to an extent that was impossible as a result of false media allegations. Accordingly, Mr Nix’s comments at the Meeting would have prevented the Mercers from putting in further funding in 2018 and would have therefore prevented the Companies from surviving 2018.”

“What you have here is evidence which supports that because the consequences of the revelations, the publicity of those, was such that they would not have continued to fund. That is what Ms Mercer has said…” “…Taking account of the evidence you have heard and the evidence you have heard discloses quite clearly that the suggestion that the company only went down because of the Facebook scandal and did not go down because of the meeting scandal is wrong as a matter of fact.”

“DRL’s primary case is that either one of the matters referred to above would have resulted in the failure of the Cambridge Analytica business by reason of the adverse publicity generated. In the alternative, DRL contends that one of the matters referred to above, or alternatively both of them cumulatively, led to the failure of Cambridge Analytica.”

“The Channel 4 broadcast and the ICO’s well-publicised execution of its search warrant were disastrous for Cambridge Analytica. Customers and suppliers almost immediately began to abandon Cambridge Analytica.”

“DRL and Emerdata submit as follows as to the competing causative factors for Cambridge Analytica’s collapse: 58.1. Allegations around Cambridge Analytica’s use of the GSR data dated back to late 2015 and were therefore nothing new. Whilst there may have been a number of articles on the subject published in The Guardian in March 2018, the fact was that all GSR data had been deleted in 2016 and litigation against GSR had been threatened and settled. Cambridge Analytica’s suppliers and customers were well-aware of Cambridge Analytica’s alleged association with the GSR data from previous media reports, and there is no reason to think that they would suddenly abandon Cambridge Analytica because of a flurry of activity from The Guardian, especially once the truth about the GSR data had been explained to them. The involvement of Christopher Wylie added nothing, since he was a very junior and disgruntled ex-employee, whose credibility would not have withstood scrutiny (Mercer 1 ¶49 – 50 {C/1.1/14}). 58.2. By contrast, Mr Nix’s comments at the Meeting represented a genuine, new and up to date act of impropriety for which there was no justification or explanation (the best Mr Nix could ever have said by way of explanation being either (i) that he had provided such services or (ii) that he offered to provide such services). Mr Nix has sought to suggest that there was comparatively little media interest in the story arising from the Meeting, but the relevant factor is not media interest, but the significance it was felt to have among Cambridge Analytica’s clients and suppliers. Moreover, Mr Nix has cited exclusively from articles in The Guardian at Nix 1 ¶161, whereas if the Court takes judicial notice of, for example, a BBC article dated 21 March 2018 (https://www.bbc.co.uk/news/technology-43465968) it will note that the article leads by discussing Mr Nix’s comments at the Meeting. 58.3. Mr Nix had never expressed any contrition to the board or to the Mercers in respect of the GSR data, yet as early as 26 March 2018 Mr Nix wrote to Emerdata’s board expressing personal regret and culpability for Cambridge Analytica’s adverse circumstances. Nothing had changed by 26 March 2018 to make the story about the GSR data any more accurate; the only developments in events that would explain Mr Nix’s sudden contrition and acceptance of responsibility were the Channel 4 broadcast and the ICO’s raid, and that is plainly what he accepted responsibility for. 58.4. Mr Wheatland has given evidence in the strongest terms (Wheatland 1 ¶44 ) that his instant reaction to knowledge of the content of the Channel 4 broadcast was that it would be catastrophic for Cambridge Analytica, and so he considers it proved. His evidence is supported by contemporaneous documents on which DRL and Emerdata will rely at trial.”

“I remember reading the transcript and thinking that we would not have a customer by the end of the month. I was right about that, but it turned out we didn’t have any suppliers either. We were cut off by Twitter and Facebook. He destroyed the company.”

“2.3 Use of intelligence gathering organisations to obtain information to discredit political opponents 2.4 Manipulation of social media platforms, and use of the Internet, to anonymously distribute negative material to discredit political opponents 2.5 Use of untrue negative material to discredit political opponents 2.6 Operating secretly through the use of fake ID's, fake websites, and different company names, and obscuring activity through alternative entities or corporate vehicles 2.7 Using subcontractors to shield links between CA and its activities abroad 2.8 Role and activities in the Kenya elections, in 2013 and 2017 2.9 Role in the Donald Trump presidential campaign 2016 2.10 Use of data in the Donald Trump presidential campaign 2016 2.11 Use of Data Analytics - Profiling and Use of fear 2.12 Acting as an apparent intermediary for coordinated communications between the Donald Trump presidential campaign 2016 and the Make America Number 1 super-PAC 2.13 "Defeat Crooked Hillary" and voter disenfranchisement 2.14 Comments about the House Intelligence Committee Hearing, the inquiry by Special Counsel Robert Mueller, and President Trump 2.15 Use of jurisdiction to prevent cooperation with ongoing inquiries 2.16 Use of secret encrypted email accounts with self-destruct timers to avoid scrutiny and prevent disclosure 2.17 Reasonable grounds to investigate CA's involvement with an alleged attempt by Russia to interfere with the US 2016 presidential election”

“On 16 January 2018 Mr Nix and Mr Turnbull attended a meeting with our undercover reporter at the Berkeley Hotel (hereafter referred to as the 'Second Berkeley Meeting'). Mr Nix made a series of admissions including the offer of entrapment of political opponents, the use of sex workers as honeytraps to obtain compromising material, fake identities and the use of British and Israeli contractors to carry out "intelligence gathering." Mr Nix made it clear that CA could contract with our reporter using unknown companies, including ones registered in the state of Delaware. Mr Nix provided further details of his relationship with President Donald Trump and CA's role in his presidential campaign. He also spoke about his long-standing relationship with Mr Steve Bannon. Mr Nix made a series of comments about the investigations being carried out by the FBI Special Prosecutor and a number of Congressional committees in the United States into the Trump campaign, outlined how CA intends to deal with these inquiries and how the company carries out its communications using encrypted email and messaging services which leave no evidence.”

“The Guardian & Observer news team is considering publishing articles that will report that Cambridge Analytica was the beneficiary of the harvesting of up to 58 million Facebook profiles which were then used to psychologically profile and target US voters…”

“Data firm pitched 'illegal offer targeting overseas donors' to Leave.EU. Arron Banks gave MPs document with information about rejected offer from Cambridge Analytica”

“A controversial data marketing firm appeared to propose raising money from Brexit-supporting foreign donors on behalf of the Leave.EU campaign, in breach of UK election law. Cambridge Analytica told the group fronted by Nigel Farage and Arron Banks they could target wealthy people from the US, …”

“139 On 17 March 2018, Channel 4 aired a 'Series' over 5 days called "Data, Democracy and Dirty Tricks" in 7 parts and each had a different title (a) the whistleblower (16 minutes), (b) the sales pitch exposure (19 minutes), (c) Trump campaign (17 minutes), (d) Nix suspended (4 minutes), (e) the Brexit Whistleblower (16 minutes), (f) The Mexico allegations (7 minutes) and (g) The Cambridge Analytica data still circulating (10 minutes). The focus of these broadcasts was on the use of data, although among each part references are made to various undercover meetings. I principally featured in part two ('The Sales Pitch exposure'), which had extracts of the meeting on 16 January 2018 at the Berkeley Hotel London. 140. This 'Series' was interspersed and followed up with extensive related reporting on Channel 4 News, which expanded on the main themes of the 'Series' and also introduced new reporting on the companies as news became available. 141. In total I believe some 25 separate programmes were broadcast between 17 March 2018 and 11 July 2018 at a total of 4 hours, 6 minutes and 7 seconds. The reporting that included the sting operation (detailed below) accounted for 10 minutes and 42 seconds of programming, spread across three episodes of the 'Series': Data, Democracy & Dirty Tricks - Episode 2 (5 mins 50 secs), Data, Democracy & Dirty Tricks - Episode 3 (35 Secs) and Data, Democracy & Dirty Tricks - Episode 4 (4 mins 17 secs).”

“REVEALED: Senior executives at Cambridge Analytica, the data company that credits itself with Donald Trump's presidential victory, secretly filmed saying they could entrap politicians in compromising situations with bribes and Ukrainian sex workers and using ex-spies to dig dirt on political opponents…”

“17 March 2018 (5 articles) -How Cambridge Analytica turned Facebook 'likes' into a lucrative political tool -Cambridge Analytica whistleblower: We spent $1m harvesting millions of FaceBook profiles -Cambridge Analytica: links to Moscow oil film and St Petersburg university -Staff claim Cambridge Analytica ignored US ban on foreigners working on elections -Revealed: 50 million Facebook profiles harvested for Cambridge Analytica in major data breach” 18 March 2018 (6 articles) -I made Steve Bannon's psychological warfare tool: meet the data war whistleblower -Data scandal is huge blow for Facebook - and efforts to study its impact on Society -Democrats call on Cambridge Analytica head to testify again before Congress - Adam Schiff says Trump campaign may have used 'illegitimately acquired data' to help sway election -What is Cambridge Analytica? The firm at the centre of Facebook's data breach -Breach leaves Facebook users wondering: how safe is my data? -Facebook employs psychologist whose firm sold data to Cambridge Analytica 19 March 2018 (4 articles) -Facebook and Cambridge Analytica face mounting pressure over data scandal -No 10 'very concerned ' over Facebook data breach by Cambridge Analytica -Cambridge Analytica boasts of dirty tricks to swing elections -Where's Zuck? Facebook CEO silent as data harvesting GMT scandal unfolds 20 March 2018 (3 articles) - 'Utterly horrifying': ex-Facebook insider says covert data harvesting was routine -Cambridge Analytica caught in undercover sting boasting about entrapping politicians -Cambridge University asks Facebook for evidence about role of academic 21 March 2018 (8 articles) -Guardian Readers Guardian Are you leaving Facebook? Share your concerns on -MPs summon Mark Zuckerberg, saying Facebook misled them -Cambridge Analytica execs boast of role in getting Donald Trump elected -Tory donors among investors in Cambridge Analytica parent firm -The evil genius of Cambridge Analytica was to exploit those we trust most -MoD granted 'List X' status to Cambridge Analytica parent company -Cambridge Analytica was offered politicians' hacked emails, say witnesses -Cambridge Analytica 's ruthless bid to sway the vote in Nigeria 22 March 2018 (4 articles) -Mark Zuckerberg apologises for Facebook's 'mistakes' over Cambridge Analytica -'They were given an inch and took 100 miles': readers on Cambridge Analytica, Facebook and privacy -Facebook gave data about 57bn friendships to GMT academic -Cambridge Analytica scandal: the biggest revelations so far 23 March 2018 (3 articles and a video) -Facebook says warning to Guardian group 'not our wisest move' -Leaked: Cambridge Analytica's blueprint for Trump victory -Cambridge Analytica misled MPs over work for Leave.EU, says ex-director -Former Cambridge exec says she wants lies to stop.”

“Cambridge Analytica and Facebook are one focus of an inquiry into data and politics by the British Information Commissioner's Office. Separately, the Electoral Commission is also investigating what role Cambridge Analytica played in the EU referendum. “We are investigating the circumstances in which Facebook data may have been illegally acquired and used," said the information commissioner Elizabeth Denham. “It's part of our ongoing investigation into the use of data analytics for political purposes which was launched to consider how political parties and campaigns, data analytics companies and social media platforms in the UK are using and analysing people's personal information to micro-target voters.” 283.2. There was concern expressed in the US congress about the use of Facebook data by CA: “US congressional investigators want the head of data firm Cambridge Analytica to testify again before their committee, under subpoena if necessary, after a whistleblower claimed the company exploited Facebook and received millions of people's profiles that were taken without authorisation.” 283.3. The allegations about “harvesting”

“Why is it in the news? Over the weekend, the Observer revealed that in 2014, so million Facebook profiles were harvested by a UK-based academic, Aleksandre Kogan, and his company Global Science Research…Wylie, a Canadian who previously worked for Cambridge Analytica, has lifted the lid on this and other practices at the firm, which he describes as a "full-service propaganda machine". He contradicts claims made in the past by Nix, who in February told British MPs that the company did not use Facebook data in its work…”. 283.4. There was political interest in the UK in the alleged Facebook data breach by CA: “Face book and Cambridge Analytica face mounting pressure over data scandal. Growing calls in US and UK for investigations to explain data breach affecting tens of millions…No 10 'very concerned' over Facebook data breach by Cambridge Analytica” …Conservative party donors are among the investors in the company that spawned the election consultancy at the centre of a storm about use of data from Facebook.” 283.5. The undercover investigation was reported in relation to Mr Nix’ remarks about entrapment and honey traps but the focus was on the relationship with Trump and the role in the US election: “In Tuesday's second instalment of an undercover investigation by Channel 4 News in association with the Observer, Nix said he had a close working relationship with Trump and claimed Cambridge Analytica was pivotal to his successful campaign. Thanks to the reporting of the Observer, The Guardian and Channel 4, we now know that Cambridge Analytica could happily arrange for a candidate to fall into a compromising scandal with a Ukraine prostitute or a bribery sting. …Election laws will surely change as a result of Nix's bragging and Facebook's arrogant and inept response to this snowballing scandal. Nobody could get away with such brazenly political manipulation in TV ads. Why should they do so on Facebook or any other part of the web? …The Trump campaign - aided and abetted by Russian hackers and trolls, conservative billionaires, and the brainiacs of firms like Cambridge Analytica - drove its disinformation through the people we like to trust: our friends.”

“… The news keep (sic) spreading, and going to mainstream media. I don't know what will be the reaction of our current deals. This is a long weekend (Monday is holiday) and many people is on vacation, not following the news. I'll see reactions on Tuesday. Any clue about how you're dealing with customers?, will be highly appreciated. When fixed, the clarification with Facebook must have the same coverage. One portal is highlighting, the video from Channel 4 News, with Christopher Wylie, talking about 50 million of Facebook's profiles used in US elections.”

“Reuters is seeking comment in light of NY Times/Observer stories Saturday saying Trump campaign allegedly used data leaked from 50 million Facebook users involving Cambridge Analytica. The data was allegedly used by Cambridge to help the campaign to elect Donald Trump. We are also seeking comment on the announcement on Friday by Facebook that it is suspending Cambridge Analytica because it did not erase data it obtained from Facebook users inappropriately.”

“…it is not unsurprising… that if people don't want to be associated with you anymore, what they would actually do is read the contract they do have and see if there is something you are in breach of and then rely on it.”

“Channel 4 ultimately broadcast its feature including the secretly recorded footage of Alexander on 19 March 2018. I watched the videos in the USA, in the New York office with all of the other staff gathered around the TV, and everyone was shocked…My immediate thought was: you’ve just killed the company. I felt really let down. Following Alexander’s interview, things moved very quickly. Rebekah Mercer began to involve herself more closely…There had been media attention since late 2015, but the Channel 4 broadcast was on a totally different scale. Previously the adverse media interest might have caused us to miss out on some customers, but we were trading through it. We lost everything because of that recording.”

“Q. But, Ms Mercer, how can you know that if you don't know what the coverage was, you don't know what the pushback was and you don't know whether the pushback was having any effect? How could you know what comments were really causing the damage in those circumstances? A. Because his comments were what triggered everything. Q. But how could you know that if you didn't even know what the media reporting was? A. … the timing of everything. Christopher Wylie was not a significant issue or person. All of his allegations were false. He was sued already and he lost. Alexander made unbelievably serious, damaging comments that lent credibility to false things and set fire to everything and destroyed everything. Q. So your evidence is that the basis for saying that you think that Mr Nix's comments caused the damage is the timing of everything; that is the basis for your belief? A. Not just timing, the fact that what he said, he actually said. He made (inaudible) believe that Cambridge was engaged in exactly what they were pretending it was engaged in, when it wasn't. But here is the president of the company claiming it was; that's unbelievably damaging. As opposed to a disgruntled employee who meant nothing and is already sued, Alexander's comments were unbelievably fatal.”

“In the period from 12 March 2018 when we were first notified of the broadcast until 23 March 2018 when the ICO executed its search warrant, we devoted very little time to dealing with the public relations consequences of Christopher Wylie's comments.”

“Q. Would you agree that in fact from just before 17 March when the stories were published, in London everyone was extremely busy dealing with the public relations consequences of Christopher Wylie's comments. Would you agree with that? A. I have no idea.”

“Q. …this is January 2022: "Emerdata is hampered in evaluating the above defences because its present board have virtually no knowledge of many of the relevant matters, having either not been in office or, in the case of Rebekah and Jenifer Mercer, having been in office for the final few weeks of the material period, but having had very little personal involvement in the management of the business." Do you agree with that statement? A. I do agree with that. Q. To wrap this section up, Ms Mercer, the position is therefore that you just weren't able at the time or now to see or understand the problems and pressures the company was facing at the time. Isn't that fair, based on what we've seen? A. Probably, but I did see a lot, those times I took over at the board but, yes, that's probably true. … Q. But even when you were on the board, we've seen from Mr Blaney you had little involvement in the management of the business. Is that right? A. That’s correct.”

“Channel 4 broadcast its feature including Alexander's covertly recorded comments on 19 March 2018. I did not actually watch the broadcast because, having learnt its contents from the letter I received from ITN, I found the idea of watching it too upsetting. However, I did discuss the contents of the broadcast in detail with various individuals, particularly Matthew Richardson. It was obvious from what Matthew told me, and from the immediate media reaction, that what Alexander had been recorded saying was going to prove hugely damaging. My immediate reaction on hearing from Matthew the detail of what was in broadcast was that Alexander had lied to me when he had denied making the remarks in the way that the notice of the broadcast had suggested. As opposed to brief comments shown with no context, Matthew explained that the broadcast consisted of long uncut speeches from Alexander in which he expressed, in a serious tone, a history of and a willingness to engage in entrapment, disseminating falsified allegations, manufacturing incriminating video footage and so on.”

“…it is a fair summary of the important part of the letter when everything else was a lie.”

“Q. Do you accept then that they were important? A. They were lies and would not stand up to scrutiny, so we would not worry about them if they were lies. Q. But nevertheless, because they were serious, they had the potential to do serious damage to the business, didn't they? A. Only if they were true, which they were not. Q. But is that really right, Ms Mercer? The allegations were going to be printed even though you maintain that they were untrue, weren't they? They were going to be printed anyway. Do you agree with that? A. I don't know. I don't know what was ultimately printed. Were they printed? Q. Well, are you aware that allegations about all of these matters were printed in The New York Times and The Guardian, or you don't recall? A. I don't recall.”

“…The reason that gave fuel to these allegations of Christopher Wylie were Alexander's remarks. That is why the ICO raided the offices later, at the end of March. Christopher Wylie -- SCL, I believe, had already successfully sued him because he had stolen data. He had done all these things. He was not a credible person. But Alexander's comments lent credence to things he had said and therefore gave more (inaudible) there to something that wasn't there for Christopher Wylie, but was there for Alexander. Q. The ICO's decision to raid the premises had nothing to do with Mr Nix's comments, did it? A. I believe it actually did. Q. And what is that belief based on, Ms Mercer? A. The timing.”

“In the [Administrators’] Proposals we mention that as widely reported in the media, there were accusations in certain UK and US newspapers and other media outlets regarding the use of Facebook data by the Companies. The significant adverse publicity created by this reporting led to the purported loss of several existing and pending contracts and projects that the Companies were engaged in and damage to the Cambridge Analytica brand. In addition to the loss of clients and potential clients, many resolved to withhold or contest payment of their accounts. In some instances, clients demanded the return of funds paid on account of work being done.”

“I had been informed by staff that the financial viability of the trading entities was further compromised by the ICO in exercise of their statutory powers, seizing all of the Companies' computer equipment holding financial and other records and data located at the Companies' leasehold premises at 55 New Oxford Street, London WClA lBS on 23 March 2018. The seizure of the computer and other electronic equipment of the Companies was said to have meant that the existing customer projects could not be completed and resulted in the Companies encountering difficulty in accessing and using data management tools and other data technology. For that reason we included in the Proposals a reference to the ICO's seizure of computer equipment having a negative impact on the business. That said, as I have explained at paragraph 10 above, I had only incomplete information available when preparing the Proposals. The comment about the ICO's seizure of equipment having a negative impact on the business therefore did not reflect a conclusion I had drawn following a detailed review; as I say it reflected what I was told by staff, which was the best I had to go on at the time.”

“In light of recent very concerning developments and pending government and/or other agency inquiries into allegations of, among other things, CA's misuse of personal data, this letter shall serve as official notification of MJN's termination of the Agreement…”. [emphasis added] 318.2. Letter from LiveRamp Inc dated 20 March 2018: “…Given recent reports of SCL Group's improper use of Facebook user data and the related suspension of SCL Group from Facebook, we have good reason to believe SCL Group has materially breached Section 6 of the Agreement, wherein "Client warrants that it fully owns or has the authority to use the Client Data as set forth herein, and that in obtaining or collecting Client Data, it did not violate the law or the rights of any third party." By this letter, LiveRamp hereby provides notice to SCL Group of its intent to terminate the Agreement, and upon ten (10) days of your receipt of this letter, will deem the Agreement to be terminated.”

“…Update on Lotame - while the CEO is personally extremely supportive, he came back to me today to say that a majority owner on their board has expressed significant concerns about backlash on their side if an investigation proves that we uploaded illegal data into their DMP…”. 318.4. Letter from SCL Posedion 23 March 2018: “…Based on the information available to us, Facebook, Inc. has suspended SCL and its political data analytics company, Cambridge Analytica, from Facebook with effect on March 16 due to a violation of its Terms of Service. Moreover, compromising video footage obtained by Channel 4 News gives reason to believe that executives of Cambridge Analytica have been actively involved in unethical practices such as bribery and entrapment of political targets on behalf of clients. While these allegations against SCL may prove to be inaccurate or incorrect, the media coverage and pending investigations of the business practices of SCL and Cambridge Analytica make it unreasonable for LG to maintain contractual relationships with SCL. Moreover, it is inarguable that the suspension from Facebook renders it impossible for SCL to fulfil its contractual obligations in due course. As a result, we hereby inform you of our decision to exercise our right of immediate termination of the Agreement…”. [emphasis added] 318.5. Letter from Linn Freedman of Robinson Cole representing Direct Care dated 4 April 2018: “…On March 16, 2018, Direct Care was notified of CA's suspension from its use of the Facebook social media platform to conduct its digital marketing analytics. The suspension rendered the ability for CA to provide the digital marketing services that is the subjectmatter of the Agreement to Direct Care impossible. Therefore, CA has been in breach of the Agreement since March 16, 2018 and continues to be in breach to date… Direct Care engaged CA to carry out certain Services which have not been performed and cannot be cured due to the Facebook suspension. The campaign never materialized, and it is impossible for CA to provide Direct Care the Services and Work Product as promised in the Agreement due to CA's suspension from the Facebook social media platform. Therefore, Direct Care requires reimbursement of the fees it has paid to CA to date in the amount of $200,000.”

“Dear Board and Shareholders of Emerdata Ltd., There are simply no words that can adequately convey to you how very, terribly sorry I am for the current scandal. I feel personally and entirely responsible for a catalogue of misjudgements that have all been uncovered and magnified, in one coordinated attack, in an attempt to destroy the business of Cambridge Analytica. Clearly at the centre of the storm are the accusations regarding the misappropriation of Facebook data. But these have been augmented with a string of allegation regarding the ethics and integrity of the company and its management; which have been brought starkly to the attention of the world through the recordings of an undercover reporter, and a string of testimonies from disgruntled former employees and consultants. The impact on the Company will be significant, if not terminal. The impact on management and staff will be damaging, if not career ruining. Yet it is in regard to the impact on the Board and Shareholders that I am writing to you - as it is now in your hands how we move forward. Ahead of sending you (later this week) a document setting out the strategic options available to CA, I wanted to take this opportunity to share with you a very candid summary of the facts surrounding the various assertions that have been made by the press. I have tried to address as many of the allegations as possible, and certainly the most important ones. The purpose of this information is to better help you understand the acts Vs the Myths, such that you can evaluate whether you want to continue your association with the company, let alone to support it through this testing period. Whilst I recognise that my credibility is shot in the Court of public opinion, for those of you that know me better, I hope that you will trust me one more time and accept this document as, to the very best of my knowledge and enquiry, entirely honest. Where possible I have tried to support the facts presented with proof in the form of information and documentation. If there is one silver lining to the current situation it is that, however, unethical the company may appear, however, perverted management decisions may look, and however, tarnished the CA and SCL brands now are, there was never any intent to break the law. And indeed we are already being advised by a team of lawyers, on both sides of the Atlantic, that no laws have been broken. With sincere apologies”

“At that stage, you were accepting responsibility for the effect of that broadcast which had in your words augmented the effect of the Facebook issue. Do you stand by those words, Mr Nix?”

“…what you were ashamed about was not that Mr Wylie had got the better of you in bringing down the Facebook investigation on you, what you were ashamed of and deeply contrite about was the Channel 4 broadcast, which was your personal contribution to the storm that hit the company.”

“…it has been a horrible year for all of us. Specifically, there is no doubt that the political headwinds have damaged the company. In the US alone we have lost or had cancelled an estimated $8-10m of contracts as a direct result of the “Trump factor” (aka Russia, Bannon, Assange, Brexit! etc) and these are just the ones we know about. For similar reasons, we have also lost number [sic] of important employees and trading has been bogged-down with legal battles, enquiries and investigation into the company with/by The Guardian Newspaper (UK), the Information Commissions [sic] Office (UK), Electoral Commission Investigation (EU), the House Intelligence Committee, The Senate Intelligence Committee, the Mueller/FBI investigation and countless ‘investigative’ journalists and conspiracy theorists who have made it their mission to destroy our brand and goodwill.”

“The allegations about harvesting GSR data were revived in March 2018 by comments by Wylie: “Why is it in the news? Over the weekend, the Observer revealed that in 2014, so million Facebook profiles were harvested by a UK-based academic, Aleksandre Kogan, and his company Global Science Research…Wylie, a Canadian who previously worked for Cambridge Analytica, has lifted the lid on this and other practices at the firm, which he describes as a “full-service propaganda machine”

“Our reasonable grounds for suspecting that Facebook data and/or derivative data obtained from GSR is held or on behalf of by your client, includes evidence from a whistle blower, previous responses from your client and apparent contradictions on this issue. We are not satisfied that this aspect of our investigation has been in any way resolved by your client's response.”

“Breaking the Rules Leads to Suspension Several days ago, we received reports that, contrary to the certifications we were given, not all data was deleted. We are moving aggressively to determine the accuracy of these claims. If true, this is another unacceptable violation of trust and the commitments they made. We are suspending SCL/Cambridge Analytica, Wylie and Kogan from Facebook, pending further information.”

“After detailed discussions we discussed the possibility of the suspension being lifted on the basis that we: a. submitted an affidavit confirming that we had continued to comply with their certification to Facebook; b. submitted to a forensic review of our systems by Stroz Friedberg, a highly regarded auditor who do a lot of work for the ICO; c. provided Facebook with a list of those who had access to Cambridge Analytica's servers; and d. investigated whether Christopher Wylie took any Facebook data when he left Cambridge Analytica. 75. We were happy to agree to these requests if it was to mean that we would regain access to the Facebook platform. Solicitors acting on behalf of Facebook attended our offices in the evening of 19 March 2018 with heads of terms for agreement. At that point Facebook were told by the ICO not to proceed with the above actions.”

“Q. – but you recognised, didn't you, that the broadcast going out on the 19th threatened the very future of the company? A. Which broadcast, the Channel 4 broadcast? Q. The one about you, in the Berkeley Hotel. A. Of much more, of paramount concern, was the issue about data. That was the concern; the data scandal. We were a data company. Cambridge Analytica, the clue is in the name; Analytica. We were a data company, we were set up to do data analytics. Our entire business was based on data, using data, modelling data and employing data. That is what we did. If the data scandal went ahead and/or Facebook shut us off their platforms and other service providers, we were dead as a company. It was a data scandal. It is still a data scandal today; "the Facebook data scandal". That is what it was about.” “The Cambridge Analytica scandal and the demise of the company was about the perception of wrongdoing. As Ms Mercer said, it transpired one, two, three years later that many -- well, not many, all of the allegations against the company were false, okay? But the perception was at the time that they were all real and it was the perception that was driving the news media and the perception that was driving our customers' and suppliers' decisions to leave us and the perception that informed all of the investigations. It was the perception. It had nothing to do with the reality. So, you can say, well, that didn't turn out to be true, that wasn't true, but it was years later that that was proven. But this scandal was over in six weeks -- rather, the company was over in six weeks. Actually, it was over by 17 March, the moment Facebook cut its platform. That is when it was over. The business died on that day, in my view. We couldn't have survived without it.”

“52. At the time at which Emerdata entered into the SPA, Mr Nix was a director of Emerdata, having been appointed at an earlier stage of completion of Project Dynamo. As such, at the point at which Emerdata entered into the SPA, Mr Nix owed Emerdata the duties set out at paragraph 46 above. Further or in the alternative, in the particular circumstances of Project Dynamo (in particular that Mr Nix was orchestrating Project Dynamo and was about to become a director of Emerdata), Mr Nix owed Emerdata fiduciary duties in like terms to the statutory duties identified at paragraph 46 above. 53. Mr Nix breached one or more of those duties by failing to notify the rest of the board of Emerdata, as he should have done prior to it entering into the SPA, of the comments he had made at the Meeting. This Notice of this kind would naturally have been particularly important to Emerdata, given that investment was being made in circumstances where Cambridge Analytica was subject to intense media scrutiny and was the subject of allegations of unethical conduct that had damaged its business. 54. Had Mr Nix notified the rest of the board of Emerdata of the comments that he had made at the Meeting in advance of the execution of the SPA, Emerdata would not have entered into the SPA. Accordingly, Mr Nix’s breach of duty caused Emerdata to invest US$19m in acquiring Group’s shares, which investment was wasted in view of the failure of Cambridge Analytica. DRL, as assignee of Emerdata (or alternatively Emerdata on its own account as pleaded above), is accordingly entitled to, and seeks, damages to compensate it for the Sterling equivalent of the US$19m (at the exchange rates prevailing at the date of trial or at such other date as the Court may find) Emerdata paid out on completion of Project Dynamo.”

“The culmination of Project Dynamo took place on 23 January 2018, known as "Completion Day". The completion process was intricate and unfolded in several stages (though I am not sure in what order): (a) Emerdata acquired the shares in CA LLC in exchange for the units in CA LLC (b) Emerdata and the Investors entered into the "Share Subscription Agreement", whereby the new investors were to subscribe for newly issued shares in Emerdata, with the intention of raising a total of USD 30 million (although only USD 19.795 million was raised in this manner) (c) Emerdata and the shareholders of SCL Group executed a share sale and purchase agreement which outlined the terms for Emerdata's acquisition of the shares of SCL Group and (d) I and other shareholders were appointed as directors of Emerdata.”

“…I signed the director form and the share purchase agreement as part of the same signing process as explained above. I cannot say in what order I signed the documents, or how many other parties had already signed before I did.”

“In the present context, the concept encaptures a situation where one person is in a relationship with another which gives rise to a legitimate expectation, which equity will recognise, that the fiduciary will not utilise his or her position in such a way which is adverse to the interests of the principal. An example of the obligation relevant to the present case is not to exploit or take advantage of the position of fiduciary at the expense of the principal. The existence and the extent of the duty will be governed by the particular circumstances.”

“The dictum of Millett L.J. in Bristol and West Building Society v. Mothew Q [1998] Ch. 1, 18 is apposite: “A fiduciary is someone who has undertaken to act for or on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence. The distinguishing obligation of a fiduciary is the obligation of loyalty. The principal is entitled to the single-minded loyalty of his fiduciary. This core liability has several facets. A fiduciary must act in good faith; he must not make a profit out of his trust; he must not place himself in a position where his duty and his interest may conflict; he may not act for his own benefit or the benefit of a third person without the informed consent of his principal. This is not intended to be an exhaustive list, but it is sufficient to indicate the nature of fiduciary obligations…”.”

“The Shareholders agree to act in good faith in respect of all matters provided for or contemplated by this agreement and to co-operate with each other in the running and operation of the Company for the purpose of the Business.”

“(1) In the Companies Acts "shadow director", in relation to a company, means a person in accordance with whose directions or instructions the directors of the company are accustomed to act.”

“Dear Board and Shareholders of Emerdata Ltd., As you are aware, as part of the recent capital raise Emerdata Ltd. acquired SCL Group for $20m. This transaction was structured 25% cash ($Sm) and 75% convertible debt ($15m). As a 70% shareholder in SCL Group I therefore received c.$3.5min cash from this transaction in consideration for my shares in SCL Group. In light of the recent scandals surrounding the Company I have been carefully re evaluating this transaction. Specifically, as the senior executive in charge of the company at this testing time, I do not think that it is right, nor fair, that I should have benefited at the expense of the shareholders. As a matter of principal and honour, and also to show my commitment to repairing the damage that has been caused to the Company today I signed a subscription agreement for c.$1.5m of investment into the Company. You will very shortly be receiving Board minutes from Julian Wheatland that require Board approval to ratify this investment. I would be grateful if you could confirm, by email, your agreement to these minutes at your earliest convenience. Furthermore, I have committed the balance of the proceeds that I received from the transaction c.$2m. (less entrepreneurs tax at 10%) as additional investment into the Company. These funds will be transferred as soon as the paperwork can be drafted. It will be for the Board of Emerdata Ltd. to decide whether these funds are best applied to increasing the operating capital of Cambridge Analytica to help it weather the current storm and consequential fall off in revenue; seeding a New Company in which the shareholders of Emerdata Ltd. will receive equity; or whether they are best invested into a 'fighting fund' to engage a legal team to start preparing our defence against the numerous law suits that are pending. The management team are working to prepare a document that sets out all the strategic options that are available to the Board, together with a complete financial breakdown for each scenario. I understand that they will send this to you in early course. Once again, my sincere apologies for letting this happen to the Company 'on my watch'. If there is a small consolation at this difficult time, it has been heart-warming to learn that some of our most significant clients are sticking with us.”

“Dear Board and shareholders of Emerdata Background It has been brought to my attention that some shareholders of Emerdata Ltd. feel blindsided by the fact that the shareholders of SCL Group were paid $7.8m of accrued debts immediately following the capital round completed in January. For the sake of clarity and transparency, I would like to point out that these were monies that were owed to SCL by CA as part of the original Shareholder Agreement, entered into in 2014, which provided for a 15% Management Fee for servicing the company. They also included funds that SCL paid to CA to help CA manage cash flow between 2015-2017, where for much of this period SCL was financing (from its profits from global political and government work) some of the hard costs of running CA. In order to maximise the success of CA, the Board of SCL agreed NOT to take receipt of these funds for a period of nearly two years. Clearly, however, this debt had to be settled upon sale of the SCL Group to Emerdata. I can understand that this must have been a big shock for those shareholders who did not understand this arrangement or did not get the opportunity to read the documentation/financials in respect of the capital raise, but I want to assure you that not only was this payment legally binding, it was fair and fully transparent. I think that I should also point out that due to the delays in closing the financing round, by the time the Investment Agreement was actually signed in January 2018 the debts owed to SCL by Emerdata were closer to $9m, but the Board of SCL agreed to receive the amount as determined in September 2017 i.e. $7.8m. • Of the $7.8m paid by Emerdata to SCL, I received c.$5.2m from this transaction • This was in addition to the c.$3.5m that I received from the sale of my shares in SCL Group to Emerdata • Therefore, the total that compensation I received was $8. 7m As a commitment to do right by the Company, together with the wounded investors, I am willing to invest ALL of the monies ($8. 7m) that I received from these payments to assist the wind-down of CA and the capitalisation of a new business. Unfortunately, these funds will have to suffer tax, the amount of which I will confirm in early course, but which is estimated at c.$lm. I would also ask the Board to agree to let me retain a modest fighting fund to help me to finance my legal fees (currently £25k per week) in respect of the various regulatory and criminal investigations being brought against me personally in the UK. I would like to propose £300k. This will leave a balance of funds of c.$7.3m I hope these will go some way to ensuring that the 110 employees for whom I am responsible for receive a proper redundancy, will ensure that the assets of Emerdata do not fall into the hands of those who would seek to do us further harm and will provide an avenue in the future for investors to recoup some or all of their investment. Finally, I hope that this will once again prove to the Board and shareholders that I have only ever had the best interests of the Company at heart. Investment into Emerdata Ltd. I wrote to you on the 29th March, 10 days after the first C4 news expose into CA aired on TV, immediately offering to reinvest the c.$3.5m I had received from the sale of my shares of SCL Group into CA to try and save the Company. Unfortunately, at that time the extent of the damage to the Company was not known, and compounded by a failure to take immediate action, it is now clear that the best that Management can hope to achieve is an orderly wind down of the business. The estimated costs for this are $5-6m. I have already invested $1,455,000 into Emerdata and on Monday morning, 23rd April, I will be transferring an additional $1,545,000 into Emerdata. These funds will ensure that the Company can meet US/UK payroll and will 'buy more time' for the Board as they consider the options for moving forward. I further commit additional funds to ensure that the Company can meet the redundancy of the employees in an orderly and professional manner. CA Management are working to determine what this cost will be, but it will likely be an additional $1.5m. Firecrest Ltd. Following the (above) investment into Emerdata Ltd., taxes and a small fighting fund this will leave c.$2.8m … I would be prepared to discuss with the Board an investment of $1m to seed this business, on the condition that the business plan was restructured to ensure that the Company is not exposed to violation of SEC regulations. I would also be interested to help Firecrest to identify new investment into the business, where I was already in advanced discussions with a number of very interested parties. (Government) NewCo. I fully appreciate that my personal reputation is tarnished and certainly not in the short-term, and perhaps never, will there be a role for me in Firecrest. However, I do believe that I could provide material shareholder value by continuing to operate the traditional SCL/CA government and political business (outside of the USA). I propose to incorporate a new (off shore) vehicle to take this forward, but in due course, and following the wind-down of Emerdata and I would like to discuss with the Board taking over the CA brand - which I think that I could develop into a valuable asset. In order to give shareholders the maximum opportunity for success, in addition to their equity in Firecrest, I would like to offer them comparable equity in this business. In order to take this business forward I would like to invite a team from CA to join this business. This will not only reduce the redundancy costs of Emerdata, but will also provide additional job security to some of those employees who do not receive the opportunity to work for Firecrest Ltd. I can confirm that I already have an initial contact lined up (c.$2m) and clearly this Company would be well positioned to close any existing business that would otherwise be lost when CA Political is wound-down. The estimated costs of establishing and operating this company are $3m..… I am interested to invest the balance of the funds that I received ($1.8m) into developing this business. Integrity Following the above disbursement and investment of funds I will retain $0.00 from the 14 years I committed to building SCL / CA… … things did go wrong, and I remain very sorry and ashamed that it happened on my watch, and most specifically for my involvement in the C4 undercover documentary. However, I want to remind you all that the vast majority of allegations that have been made against the Company and its management are simply not true. In due course I am hopeful that this will be demonstrated, and you will understand that we are not the monsters that some would have us be. I look forward to discussing this proposal with the Board in early course, and in the first instance would like to offer to fly to NYC next week to meet with the Founder Investors to discuss face-to- face.”

“9.5 It is therefore obvious from the correspondence above that the parties had acknowledged the impossibility of Cambridge Analytica surviving as a business, and all that would be left was an attempt to wind down the business in an orderly way. It is a necessary implication of that correspondence, including in particular Mr Nix’s statement that he would, “retain $0.00 from the 14 years I committed to building SCL/CA” that the Loan Notes would not be repaid. This implication is fortified by the fact that Mr Nix did not attempt to avail himself of his prima facie rights under clause 3.1 and paragraph 3.2 of the Conditions (at Schedule 1 of the Instrument). Those provisions prima facie entitled Mr Nix to demand the redemption of the Loan Notes in the event of the SCL Group Companies entering into administration and/or liquidation, which they did in May 2018 and April 2019 respectively. There can be no credible rationale for Mr Nix not exercising the purported rights he now relies on at that time, other than that he considered that he had relinquished those rights. The correct legal analysis is therefore as follows: 9.15.1. Mr Nix by implication waived his rights to receive repayment of the Loan Notes and/or is estopped from asserting the right to repayment. Emerdata acted in reliance on the assurance that it would not be called upon to repay the Loan Notes in that, in May 2018, it procured the SCL Group Companies being put into administration, as a result of which there was no prospect of funds being generated to repay the Loan Notes, since Emerdata had and has no assets other than the SCL Group Companies. 9.15.2. Further or alternatively, Mr Nix and Emerdata discharged the Loan Notes and the SPA as between them by agreement. Insofar as consideration was required for that process, consideration was given by Emerdata: 9.15.2.1. Issuing Mr Nix with 25,496 preference shares, which it did on or around 16 April 2018; and 9.15.2.2. In the alternative, refraining from criticising Mr Nix in the media.”

“A mere parol release, whether oral or in writing, without valuable consideration amounts to nudum pactum and is normally insufficient to effect a discharge either at law or in equity. In order to be effective a parol release must generally be given in return for valuable consideration.”

“In the case where the parties do not make use of a deed, the release, whether it is described as an “accord and satisfaction” or simply the purchase of a release, must be supported by consideration. Similarly, a compromise which is not in the form of a deed must be supported by consideration.”

“Nonetheless, things did go wrong, and I remain very sorry and ashamed that it happened on my watch, and most specifically for my involvement in the C4 undercover documentary. However, I want to remind you all that the vast majority of allegations that have been made against the Company and its management are simply not true. In due course I am hopeful that this will be demonstrated, and you will understand that we are not the monsters that some would have us be.”

“If money is proved, or admitted, to have been paid by A to B, then in the absence of any circumstances suggesting a presumption of advancement, there is prima facie an obligation to repay the money; accordingly if B claims that the money was intended as a gift, the onus is on B to prove this fact.”

“…Furthermore, I have committed the balance of the proceeds that I received from the transaction c.$2m. (less entrepreneurs tax at 10%) as additional investment into the Company. These funds will be transferred as soon as the paperwork can be drafted…”

“…As a separate matter, I can confirm that I remain committed to invest the c.$3.5m that I received as a cash consideration for my shares in SCL Group Ltd. (less $1.45 already invested, together with applicable taxes and costs). I am prepared to do this with immediate effect, however, and as set out in my letter to the Board and Shareholders of 29th March 2018, I am still waiting for direction from the Board as to where this funds should be invested (e.g. into Emerdata Ltd. into NewCo or into a legal fighting fund etc), and an understanding on what basis these monies should be received (including appropriate paperwork).”

“Alexander confirmed that, in the spirit of our constructive conversation yesterday and in a willingness to be helpful and find a mutually acceptable resolution, he transferred to Emerdata this afternoon $290,000 to cover US payroll next week.”

“This email is to confirm that Alexander Nix ("Mr. Nix") has provided a loan of $290,000 (the "Loan") to Emerdata Limited (the "Company" and, together with Mr. Nix, the "Parties") to be used to fund payroll obligations of the Company and/or any direct or indirect affiliates of the Company. The Loan will accrue interest at a rate per annum equal to 2.25 percent compounding annually, which interest shall be payable upon repayment of the Loan. The Company expressly acknowledges that the Loan will be payable within five business days of any demand for repayment by Mr. Nix, provided however, that such demand may not be made prior to 180 days from the date of this email. The Parties further agree that the amount of the Loan shall be credited against any payment Mr. Nix may make to the Company and/or its individual investors in connection with an agreed to settlement, and, upon such credit, the principal amount of the Loan will be reduced by the amount so credited, but, in no event, not below zero. The Parties further agree that the Loan is being made without prejudice to the Parties' respective positions in connection with any dispute they may have relating to the Company and/or any of its direct or indirect subsidiaries. The Parties further agree that the foregoing terms shall apply to any other loans Mr. Nix makes to the Company to assist in the funding of wind-up or payroll obligations incurred by the Company and/or any direct or indirect affiliates of the Company.”