Facebook’s share value has been in a tailspin as the depths of its irresponsible data handling has become known to the world. Salting that wound is a class-action lawsuit, filed today in California’s Northern district, on behalf of the social media giant’s shareholders.
Fan Yuan, the shareholder who filed the suit, accuses Facebook of making “materially false and/or misleading” claims about the company’s handling of user data—meaning the instances where Facebook or Zuckerberg himself addressed privacy and security issues and failed to disclose the ongoing Cambridge Analytica fiasco.
Cambridge Analytica is certainly the most pressing of the many scandals Facebook is currently embroiled in. The shady analytics firm is believed to have gained access to personal data from around 50 million of Facebook’s users, which it employed to inform online ad spending and influence elections.
Earlier today, New York and Massachusetts demanded Facebook turn over information regarding Cambridge Analytica, and congresspeople are increasingly calling for Zuckerberg himself to testify. Cambridge Analytica meanwhile suspended its CEO Alexander Nix today over remarks recorded by British television station Channel 4 News, which feature Nix apparently speaking about entrapping politicians using sex workers.
Yuan’s suit—which represents a class of unknown size—alleges that failures to disclose the ongoing situation with Cambridge Analytica has reduced the value of shares he and others hold in the company. He’s asking to award damages unspecified and any other amount the court deems proper.
We’ve reached Pomerantz LLP, the firm representing Yaun, for comment.
Facebook declined to comment on the suit and pointed us instead to a prior statement by Facebook VP and general council Paul Grewal: “We are committed to vigorously enforcing our policies to protect people’s information. We will take whatever steps are required to see that this happens.”
Read the full suit below: