On June 10, the Supreme Court decided to examine a major shareholder lawsuit alleging that Meta Platforms Inc., the parent company of Facebook, misled investors about a scandal involving data harvesting by Cambridge Analytica, a political consulting firm.
The Supreme Court’s eventual ruling in the case could have an effect on corporate disclosure standards going forward.
The lawsuit centers on a class action lawsuit related to securities fraud, stemming from the actions of the now-defunct UK-based Cambridge Analytica, which allegedly acquired and misused Facebook user data unlawfully. This information comes from Facebook’s submission to the nation’s highest court.
In December 2022, Meta agreed to pay $725 million to settle a class-action lawsuit that accused the company of allowing third parties, like Cambridge Analytica, to access the personal information of up to 87 million users. The incident was revealed to the public in 2018.
Cambridge Analytica, which had previously collaborated with then-candidate Donald Trump during his successful presidential campaign in 2016, gained access to personal data from millions of Facebook accounts without the users’ consent. This data was used to target and profile voters. The information was harvested through an app.
The scandal led to government investigations and Meta CEO