According to Facebook, news broke in 2015 about the Cambridge Analytica data breach, but its business was not immediately affected. Following that logic, social media companies would only disclose a data breach in an SEC filing if Facebook knew that an ongoing data breach was likely to harm its business. I hope SCOTUS agrees that there is a need.
Facebook affirms the 9th round -round court, and Scotus has “significantly expanded the situation where risk disclosure is false or misleading”, and has been exempted so far, “forecasting profits and future businesses. “Broad forward-looking statements” made by the company would be subject to legal challenge. such as plans and goals. ”
But the investors in the lawsuit claim that Facebook continues to mislead them about the data scandal in court filings.
“Facebook’s only explanation for why this misappropriation posed no risk of harm is because the incident was allegedly disclosed to the public in 2015,” the SCOTUS briefing for investors said. It’s just that they didn’t pay attention to it.” But in 2015, a report exposing a data breach related to Ted Cruz’s campaign was denied by Cambridge Analytica, leading to an investigation into Facebook and the conclusion that no harm had been done.
The investors said, “Facebook actively misled the public about the investigation and ‘represented that no wrongdoing had been discovered,'” and that “Facebook’s deceptions extended to its public filings with the SEC.” he claimed.
The real damage, investors say, occurred in 2018 when the true scope of the Cambridge Analytica scandal was exposed. That led to significant revenue losses, and Facebook likely knew it was taking a risk, but investors are said to have been unaware of the risk for years.
Investors argue that Facebook shouldn’t be required to disclose all data breaches that hit it, whether they hurt the business or not, but the Cambridge Analytica data breach was significant and They argue that it should have been disclosed as a risk. The Ninth Circuit agreed, stating that “companies have hidden the truth from the public, and publicly treating such material adverse events as mere hypothetical prospects, even if the event “Even if it has not yet caused any damage, it may be misleading.”
