[Fox Business] Supreme Court dismisses appeal from Facebook owner Meta over securities fraud lawsuit
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The Supreme Court dealt a setback Friday to Facebook’s owner Meta Platforms by dismissing their appeal of a securities fraud lawsuit accusing the tech giant of misleading investors during the data-harvesting scandal involving Cambridge Analytica.
In a one-sentence unsigned opinion, the Supreme Court did not provide a reason for dismissing Facebook, Inc. v. Amalgamated Bank, just saying it was “improvidently granted.” It now means the lawsuit can continue in lower courts.
Plaintiffs in the case argue that Facebook violated the Securities Exchange Act and unlawfully withheld information from investors surrounding the 2015 data breach tied to Cambridge Analytica, a British political consulting firm, according to Reuters.
In 2018, Facebook’s stock plummeted when media reports exposed that the firm used improperly harvested data from Facebook to support Donald Trump’s successful 2016 presidential bid, the website added, noting that the investors are now seeking monetary damages to help recoup the lost value of the stock they had held.
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The lawsuit contains a securities filing that Facebook released in 2016 admitting that improper third-party use of its data could hurt the company, but the filing cast the risk as hypothetical, leading shareholders to argue it misled them into thinking no such data breach had occurred, The Hill also reported.
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“No reasonable investor would interpret a risk disclosure using probabilistic, forward-looking language as impliedly representing that the specified triggering event had never occurred in the past, particularly in light of the regulatory context,” attorneys for Facebook wrote in a previous filing. “Meta’s warnings that business harm could result in the event of data misuse did not imply that Meta had never previously experienced such misuse.”
A company spokesperson told FOX Business on Friday that “The plaintiff’s claims are baseless and we will continue to defend ourselves as this case is considered by the District Court.
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“We are disappointed in the Supreme Court’s decision not to clarify this part of the law,” the spokesperson added.
FOX Business’ Bill Mears and Shannon Bream contributed to this report.
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