Data Analytics Giant Comscore, Former CEO Settle With SEC for Cooking the Books

Former Comscore CEO Serge Matta, 2015.
Photo: Mike Pont (Getty Images for AWXII)

Data analytics firm Comscore and its former CEO, Serge Matta, was charged by the U.S. Securities and Exchange Commission over allegations of widespread fraud at the company and have settled for over $5 million, the agency announced on Tuesday.

According to the SEC, Comscore and Matta stuffed its public revenue filings to overstate revenue by $50 million from 2014-2016. As the Los Angeles Times noted, that $50 million in revenue never existed but helped the company “beat Wall Street analysts’ sales estimates for seven quarters,” artificially inflating Comscore’s value. The SEC also found that “Comscore and Matta made false and misleading public disclosures regarding the company’s customer base and flagship product,” namely by misrepresenting its number of customers as increasing rather than decreasing, “and that Matta lied to Comscore’s internal accountants and external audit firm” as part of an effort to cover it up.


The SEC also said Comscore lied to investors about “sales of a flagship product that measured ad campaigns, saying it grew when it actually fell,” the Times wrote. Neither Comscore or Matta have to admit wrongdoing as part of the settlement.

News of the conduct later investigated by the SEC first broke in a 2015 Wall Street Journal article that noted “much of the company’s reported top-line growth has come from revenue that brings no cash in the door.”

The settlement required Comscore to pay penalties of $5 million, while Matta will pay penalties of $700,000 and refund $2.1 million to Comscore. The SEC has also banned Matta from serving as an official of a public company for the next decade. As AdWeek noted, this has been a tough year for Comscore, which lost another CEO and its president earlier this year.

Comscore is one of the biggest data analytics companies in the nation, which gives it immense power over what is seen online and where. For example, its web traffic data has continually been cited in coverage of layoffs in the journalism sector (as well as implicitly informs executives making those layoff decisions and the broader media market which journalists work in). It’s also long been an open secret in media that web metrics writ large are bullshit and that Comscore is no stranger to this debate.


In fact, in 2010, Comscore was accused of operating a de facto protection racket by offering more advanced metrics to paying customers, with some journalistic outfits using its free tools suspecting Comscore was grossly undercounting its numbers. (At the time, Comscore insisted that’s just not how it works and that it needed to subsidize the cost of more accurate measurement, and it later released some of those tools for free to smaller websites.) Amid a controversy over inflated Facebook advertising metrics in 2016, multiple publishers told CNBC they disputed the accuracy of Comscore’s numbers. So this is not a good look for a company whose whole business is supposedly providing accurate numbers.


“Comscore and its former CEO manipulated the accounting for non-monetary and other transactions in an effort to chase revenue targets and deceive investors about the performance of Comscore’s business,” SEC Enforcement Division associate director Melissa R. Hodgman told AdWeek in a statement. “We will continue to hold issuers and executives accountable for such serious breaches of their fundamental duty to make accurate disclosures to the investing public, while giving appropriate credit for a company’s prompt remedial acts and cooperation.”

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Tom McKay

"... An upperclassman who had been researching terrorist groups online." - Washington Post