WASHINGTON, DC (March 23, 2018) — U.S. Market Advisors Law Group PLLC announces that a securities class action has been filed against Facebook, Inc. (“Facebook” or the “Company”) (NASDAQ: FB). The class action is on behalf of investors who acquired Facebook securities between February 3, 2017 and March 19, 2018.
Facebook operates a social networking website that allows people to communicate with their family, friends, and coworkers. Facebook develops technologies that facilitate the sharing of information, photographs, website links, and videos. Facebook users have the ability to share and restrict information based on their own specific criteria. As of the end of 2017, Facebook had roughly 2.2 billion active users.
Allegations Against Facebook
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Facebook violated its own purported data privacy policies by allowing third parties to access the personal data of millions of Facebook users without the users’ consent; (ii) discovery of the foregoing conduct would foreseeably subject the Company to heightened regulatory scrutiny; and (iii) as a result, Facebook’s public statements were materially false and misleading at all relevant times.
On May 16, 2017, Reuters reported that France’s Commission on Informatics and Liberty (“CNIL”) had fined Facebook €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 this news, Facebook’s share price fell $5.34, or 3.55%, over two trading days, to close at $144.85 on May 17, 2017.
On March 17, 2018, the New York Times published an investigative report entitled “How Trump Consultants Exploited the Facebook Data of Millions,” revealing that Cambridge Analytica, a firm that worked to target voters online in connection with the 2016 presidential campaign of Donald Trump, used the data of 50 million people obtained from Facebook without proper disclosures or permission.
On this news, Facebook’s share price fell $12.53, or 6.76%, to close at $172.56 on March 19, 2018.
On March 19, 2018, post-market, Bloomberg published an article 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 “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 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 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.” Zuckerberg was asked to respond by March 26, 2018.
Following these news reports, Facebook’s share price fell $7.73, or 4.48%, to close at $164.83 on March 20, 2018.
Pending Lead Plaintiff Deadline Approaching
Investors with losses have until May 21, 2018 to ask the Court to be appointed as Lead Plaintiff for the class. The Lead Plaintiff is a representative for absent members of the class. Investors do not need to seek appointment as Lead Plaintiff to share in any class recovery in this action. If you are a class member and there is a recovery for the class, you can share in that recovery as an absent class member. You may retain counsel of your choice to represent you in this action. Contact USMA Law Group to discuss this action at no obligation or cost.
About USMA Law Group
U.S. Market Advisors Law Group PLLC is a national law firm based in Washington, D.C. The firm represents investors worldwide in U.S. securities class action lawsuits.
David P. Abel