The U.S. Supreme Court declined to rule on a securities fraud lawsuit against Facebook (now Meta) regarding allegations it misled investors about a 2015 data breach involving Cambridge Analytica. The court dismissed Facebook’s appeal without explanation, leaving a lower court’s 2018 decision in favor of shareholders intact.
The lawsuit, led by Amalgamated Bank, accuses Facebook of violating the Securities Exchange Act by failing to disclose the breach and instead portraying data misuse as a hypothetical risk. Facebook’s stock fell in 2018 after reports revealed Cambridge Analytica improperly accessed data from over 30 million users for Donald Trump’s 2016 campaign.
The Supreme Court’s decision preserves the 9th Circuit Court of Appeals’ revival of the case, which seeks monetary damages for investors. This dismissal comes amid broader scrutiny of the role of private lawsuits in addressing securities fraud, with a similar case involving Nvidia still awaiting a decision.
Facebook has faced multiple investigations and fines over the Cambridge Analytica scandal, including a $100 million SEC settlement and a $5 billion FTC penalty.
