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Rumble, the so-called free speech alternative to YouTube, is the subject of an investigation by the United States Securities and Exchange Commission (SEC), according to the company and a letter from the SEC.
The SEC confirmed its investigation involving Rumble in response to a public records request that WIRED first filed in November, seeking documents related to the company. The agency denied WIRED's request on the grounds that related documents were part of an “active and ongoing” investigation. Confirmation of the probe follows public allegations that Rumble inflated key user metrics, which the company denies.
The SEC says that the existence of the probe should not be an indication that “any violations of law have occurred with respect to any person, entity, or security.” The exact nature of the SEC investigation is still unknown.
“We have confirmed with Division of Enforcement staff that the investigation from which you seek records is still active and ongoing,” Melinda Hardy, the assistant general counsel for litigation and administrative practice at the SEC, said in a January 8 letter to WIRED.
Hardy added that disclosure of the documents WIRED sought as part of its Freedom of Information Act request “could be reasonably expected to cause harm to the ongoing and active enforcement proceedings because, among other things, individuals and entities of interest in the underlying investigation could fabricate evidence, influence witness testimony and/or destroy or alter certain documents.”
Rumble spokesperson Rory Rumore tells WIRED that the company provided information to the SEC voluntarily in response to a request for documents from the SEC Enforcement staff. Rumore also says in a statement: “We caution anyone from jumping to false conclusions about matters related to Rumble.”
Founded in 2013 by Canadian entrepreneur Chris Pavlovski, Rumble was originally dedicated to hosting viral videos of dogs and cats. The site now claims to push back “against cancel culture and creeping censorship,” hosting shows by Donald Trump Jr. and right-wing personality Steven Crowder. Rumble is also the official streaming partner of the Republican National Committee’s 2024 presidential primary debates.“The SEC does not comment on the existence or nonexistence of a possible investigation,” an SEC spokesperson said in an emailed statement.
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Rumble’s investors have included JD Vance, a US senator from Ohio, and Silicon Valley venture capitalist Peter Thiel, who has contributed heavily to Republican candidates. Elon Musk confidant and tech venture capitalist David Sacks sits on Rumble’s board of directors.
In May 2021, the site was reportedly valued at an estimated $500 million. In September 2022, Rumble became a publicly traded company listed on the Nasdaq as part of a Special Purpose Acquisition Company (SPAC) deal. Its valuation currently exceeds $1.2 billion.
In April 2023, investment research firm Culper Research released a report expressing skepticism about the legitimacy of Rumble’s claimed monthly active user (MAU) counts, a key metric for investors to evaluate the performance of a social media company. Culper Research said it had taken a short position in Rumble, meaning it stands to profit if Rumble’s stock price decreases.
“Combined, the web and app data suggest to us that Rumble has only 38 to 48 million unique users, and the Company has overstated its user base by 66% to 108%,” Culper Research claimed in its report.
In a quarterly earnings call following the report’s publication, Rumble reported that its monthly active users declined by 40 percent during the first three months of 2023, from 80 million to 48 million. In a financial filing, Rumble attributed the decrease in users to its popular creators being less active on the platform in the first part of 2023, and news events slowing down following the 2022 midterm elections.
“Investors should be especially dubious of rumors peddled by short-sellers who are attempting to distort facts for their own financial benefit. We are aware of misleading claims about Rumble’s monthly active user (MAU) statistics, which, as we have previously disclosed, are provided by Google Analytics,” Rumble spokesperson Rumore says. “Any suggestion that Rumble has inflated its MAUs is false—as any objective person quickly realizes upon even a cursory review of the data.”
Christian Lamarco, the founder of Culper Research, believes the change in reported users was a response to its report. “That was a bit of validation, in my view,” he says.
Updated 5:45 pm ET, January 8, 2024: Immediately following publication, Chris Pavlovski, Rumble's founder and CEO, said in a post on X that the SEC investigation was part of “the playbook to try and destroy” the company. “A short seller creates a bogus report and sends it to the SEC. The SEC investigates the bogus report. Then the short seller talks to the media to get a story about how the SEC is investigating the report that started with him. The media happily writes the story,” Pavlovski wrote. “The report is bogus, but that doesn’t matter—it’s all to get investors to sell the stock so the short seller profits.”
Pavlovski added that the company used Google Analytics to track user metrics “so we could be ready for this very moment.”
Update 2/21/24, 2:30 pm ET: On February 20, Rumble sent WIRED a letter from the Securities and Exchange Commission that stated the agency had concluded its investigation into Rumble, and that it did not intend to recommend an enforcement action against the company.
“We are providing this notice under the guidelines set out in the final paragraph of Securities Act Release No. 5310, which states in part that the notice ‘must in no way be construed as indicating that the party has been exonerated or that no action may ultimately result from the staff’s investigation,’” the letter from the SEC to Rumble stated.
William Stellmach, a lawyer for Rumble, said in an email that the letter from the SEC was authentic. The SEC declined to comment.
