The Supreme Court made a decision to dismiss an appeal by Meta Platforms, the owner of Facebook, in a securities fraud lawsuit related to the Cambridge Analytica data-harvesting scandal. The case, Facebook, Inc. v. Amalgamated Bank, accused Facebook of misleading investors during the 2015 data breach involving Cambridge Analytica. The Supreme Court did not provide a reason for dismissing the appeal, simply stating that it was "improvidently granted," allowing the lawsuit to continue in lower courts.
Plaintiffs in the case allege that Facebook violated the Securities Exchange Act and withheld information from investors regarding the data breach. The lawsuit stems from reports in 2018 that Facebook improperly used harvested data to support Donald Trump's presidential campaign, causing the stock to plummet. Investors are now seeking monetary damages to recoup their losses.
The lawsuit includes a securities filing from 2016 in which Facebook acknowledged the risk of third-party data misuse but presented it as hypothetical, leading shareholders to claim they were misled. Meta, previously known as Facebook, stated that warnings of potential business harm from data misuse did not imply that such misuse had never occurred before.
In response to the dismissal of the appeal, a Meta spokesperson called the plaintiff's claims baseless and reiterated their commitment to defending themselves in the District Court. The company expressed disappointment in the Supreme Court's decision not to clarify this aspect of the law.
Overall, the dismissal of the appeal allows the securities fraud lawsuit against Meta Platforms to proceed, with the allegations of misleading investors during the Cambridge Analytica scandal at the forefront. The case will now continue to be litigated in lower courts as both parties navigate the legal process.