Supreme Court hears Facebook’s bid to toss shareholder suit over Cambridge Analytica scandal
They shareholders lawsuit claims the company unlawfully withheld information from investors about a 2015 data breach involving British political consulting firm Cambridge Analytica
The US Supreme Court grappled on Wednesday over a bid by Meta’s Facebook to scuttle a federal securities fraud lawsuit brought by shareholders who accused the social media platform of misleading them about the misuse of its user data.
The justices heard arguments in Facebook’s appeal of a lower court’s decision allowing the 2018 class action led by Amalgamated Bank to proceed. It is one of two cases coming before them this month – the other one involving artificial intelligence chipmaker Nvidia — that could lead to rulings making it harder for private litigants to hold companies to account for alleged securities fraud.
The plaintiffs accused Facebook of misleading investors in violation of the Securities Exchange Act, a 1934 federal law that requires publicly traded companies to disclose their business risks. They claimed the company unlawfully withheld information from investors about a 2015 data breach involving British political consulting firm Cambridge Analytica that affected more than 30 million Facebook users.
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