Facebook's Legal Hurdles: Supreme Court Declines Involvement in Data Fraud Case

The U.S. Supreme Court declined to rule on a Facebook securities fraud lawsuit, letting a lower court decision allowing the case to proceed stand. The case involves allegations that Facebook misled investors about a data breach linked to Cambridge Analytica, affecting millions of users and impacting stock value.

The U.S. Supreme Court on Friday sidestepped a significant decision regarding a securities fraud lawsuit against Meta's Facebook. Shareholders accuse the social media giant of misleading investors about a significant misuse of user data.

The lawsuit, led by Amalgamated Bank, contends that Facebook violated the Securities Exchange Act by not disclosing a 2015 data breach by Cambridge Analytica. This misconduct allegedly resulted in a substantial loss in stock value in 2018 after media reports surfaced.

Despite Facebook's appeal for a dismissal, claiming risk disclosures are inherently forward-looking, the Supreme Court's refusal leaves a lower court's decision intact, allowing the lawsuit to proceed. Investors remain determined to seek damages, as Facebook continues to defend its position in district court.

(With inputs from agencies.)