The case centers on allegations that Facebook misled investors about a 2015 data breach involving the Cambridge Analytica scandal, which affected millions of Facebook users.
Investors claim the company violated federal securities laws by failing to disclose the breach in subsequent risk filings, instead downplaying it as a hypothetical issue. Following media reports about the scandal in 2018, Facebook’s stock price took a hit, prompting the lawsuit seeking damages.
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The Court’s decision, issued in a one-line order without further explanation, leaves open questions about the legal requirements for corporate disclosures on data privacy risks. The dismissal is a setback for Facebook, but the case will now continue in lower courts.
This case is part of a broader series of Supreme Court cases concerning the right of private investors to hold companies accountable for alleged securities fraud, with another high-profile case involving Nvidia still pending.
