Facebook Inc (NASDAQ: FB) Investor Securities Class Action Lawsuit 03/20/2018

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Company Name(s): 
Facebook
Case Name: 
Facebook Shareholder Class Action Lawsuit 03/20/2018
Case Status: 
Lawsuit Filed
Affected Securities
NASDAQ: FB
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
03/20/2018
Class Period Begin: 
02/03/2017
Class Period End: 
03/19/2018
Court of Filing: 
U.S. District Court for the Northern District of California
Deadline To File for Lead: 
05/21/2018
Summary: 

May 21, 2018 - Lead plaintiff motions were filed.

March 20, 2018 - An investor in shares of Facebook Inc (NASDAQ: FB) filed a lawsuit in the U.S. District Court for the Northern District of California over alleged violations of Federal Securities Laws by Facebook Inc in connection with certain allegedly false and misleading statements made between February 3, 2017 and March 19, 2018.

According to the complaint the plaintiff alleges on behalf of purchasers of Facebook Inc (NASDAQ: FB) common shares between February 3, 2017 and March 19, 2018, that the defendants violated Federal Securities Laws.

More specifically, the plaintiff claims that between February 3, 2017 and March 19, 2018, the defendants made false and/or misleading statements and/or failed to disclose that Facebook Inc violated its own purported data privacy policies by allowing third parties to access the personal data of millions of Facebook Inc users without the users’ consent, that discovery of the foregoing conduct would foreseeably subject the Company to heightened regulatory scrutiny, and that as a result, Facebook Inc’s public statements were materially false and misleading at all relevant times.

On May 16, 2017, it was reported that France’s Commission on Informatics and Liberty (“CNIL”) had fined Facebook Inc €150,000—the maximum amount then allowed within the CNIL’s authority—for “failing to prevent its users’ data being accessed by advertisers.” The article stated that the fine was said to be “part of a wider European investigation also being carried out in Belgium, the Netherlands, Spain and Germany into some of Facebook’s practices.”

On March 17, 2018, an article was published alleging that voter-profiling company Cambridge Analytica (“Cambridge”) had “harvested private information from the Facebook profiles of more than 50 million users without their permission… making it one of the largest data leaks in the social network’s history.” The next day, March 18, 2018, the Massachusetts Attorney General said her office was launching an investigation. On March 19, 2018, European Union officials also said they would investigate.

On March 19, 2018, an article was published entitled “FTC Probing Facebook For Use of Personal Data, Source Says,” disclosing that the U.S. Federal Trade Commission (“FTC”) is “probing whether Facebook violated terms of a 2011 consent decree of its handling of user data that was transferred to Cambridge Analytica without [user] knowledge.” Under the 2011 settlement with the FTC, Facebook Inc “agreed to get user consent for certain changes to privacy settings as part of a settlement of federal chargers that is deceived consumers and forced them to share more personal information than they intended.” The article further stated that “if the FTC finds Facebook Inc violated terms of the consent decree, it has the power to fine the company more than $40,000 a day per violation.”

On March 20, 2018, several media outlets reported that the U.K. Parliament had summoned Facebook Inc Chief Executive Officer Mark Zuckerberg to give evidence over the scandal involving London-based Cambridge Analytica. In a statement, the U.K. House of Commons committee on Digital, Culture, Media and Sport Committee said: “The Representatives from Facebook previously gave evidence to the inquiry in Washington DC on Thursday 8th February. However, Facebook has since failed to supply requested supplementary evidence to the Committee by the deadline of 14th March. Subsequent information about Facebook’s connection to Cambridge Analytica raises further questions which the Committee intends to put to Facebook to answer in full.” The British lawmakers stated they want to “hear from a senior Facebook executive with the sufficient authority to give an accurate account of this catastrophic failure of process.”

Shares of Facebook Inc (NASDAQ: FB) declined on March 20, 2018 to $163.30 per share.