ROBBINS GELLER RUDMAN & DOWD LLP FILES CLASS ACTION SUIT AGAINST FACEBOOK, INC.
San Diego – March 27, 2018 – Robbins Geller Rudman & Dowd LLP (“Robbins Geller”) (http://www.rgrdlaw.com/cases/facebookinc/) today announced that a class action has been commenced on behalf of purchasers of Facebook, Inc. (“Facebook”) (NASDAQ:FB) common stock during the period between July 6, 2017 and March 23, 2018 (the “Class Period”). This action was filed in the Northern District of California and is captioned Bennett v. Facebook, Inc., et al., No. 18-cv-01868.
If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from March 20, 2018. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Darren Robbins of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at firstname.lastname@example.org. If you are a member of this class, you can view a copy of the complaint as filed at http://www.rgrdlaw.com/cases/facebookinc/. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
The complaint charges Facebook and certain of its officers and/or directors with violations of the Securities Exchange Act of 1934. Facebook is the world’s largest social networking company. In 2011, the Federal Trade Commission (“FTC”) charged Facebook with numerous violations of the Federal Trade Commission Act for, among other things, sharing users’ data without their consent. Facebook formally agreed to settle the charges and enter a consent decree with the FTC on August 10, 2012.
On December 11, 2015, The Guardian published an article titled “Ted Cruz using firm that harvested data on millions of unwitting Facebook users.” The Guardian stated that “surreptitious, commodified Facebook data” was being used in political campaigns and “represented an intensified collision of billionaire financing and digital targeting on the campaign trail.” In fact, The Guardian had already determined how an academic from Cambridge had combined with a billionaire financier to create what turned out to be a series of overlapping companies, the best known of which is now Cambridge Analytica, that planned to use Facebook data to create psychological profiles for the purpose of designing political campaigns and advertisements. The article further reported that Facebook was aware of The Guardian’s report and declared that the Company was taking action.
Then, beginning on March 16, 2018, a series of media reports about Facebook and Cambridge Analytica were published, based in part on a whistleblower’s account and a “dossier of evidence.” On March 17, 2018, The Observer and The New York Times each published articles on Cambridge Analytica’s use of Facebook data. The articles revealed, among other things, that 50 million or more Facebook accounts had their data shared with Cambridge Analytica for improper political purposes without their explicit permission, far more than previously thought; that the data had not been destroyed, or even protected with encryption; and that Facebook knew this and had not acted. Indeed, the one action Facebook claimed to have taken – asking the parties involved to certify destruction of the data – did not happen until August 2016, long after Facebook was alerted by The Guardian in 2015 to the improper sharing of users’ data. On March 18, 2018, The New York Times reported that U.S. Senator Mark Warner and U.S. Representative Adam Schiff were calling for an investigation of the Facebook data leak, while U.S. Senator Amy Klobuchar had pressed Zuckerberg to appear before the Senate Judiciary Committee to explain what the social network knew about the misuse of its data “‘to target political advertising and manipulate voters.’” On March 19, 2018, a WCCFTech article reported that Facebook faced billions or even trillions of dollars in liability for violating a previous consent decree with the FTC, and that “The FTC consent decree required Facebook to notify users and explicitly receive their permission before data is shared beyond their privacy settings. In this case, the developer only received permission from those who took the test, not their friends. Facebook first learned of this incident back in 2015, however, [it] chose not to inform the agency or the affected users.” On this news, the price of Facebook common stock fell more than $12 per share, or nearly 7%, to close at $172.56 per share on March 19, 2018.
On March 20, 2018, media sources confirmed that the FTC was investigating whether Facebook had violated the consent decree. On March 21, 2018, Zuckerberg finally issued a statement and gave a number of interviews, admitting that the reporting on the data sharing was “credible,” and that Facebook needed to do a “full forensic audit” of every developer on the platform in 2014, which would necessarily include “investigating and reviewing tens of thousands of apps” and would cost “millions of dollars.” Then on March 26, 2018, the FTC issued a press release confirming that it was investigating Facebook’s privacy practices and compliance with the consent decree. In reaction to this news, Facebook’s stock price fell as much as 6.5% to $149.02 per share before closing at $160.06 per share.
Plaintiff seeks to recover damages on behalf of all purchasers of Facebook common stock during the Class Period (the “Class”). The plaintiff is represented by Robbins Geller, which has extensive experience in prosecuting investor class actions including actions involving financial fraud.
Robbins Geller is widely recognized as a leading law firm advising and representing U.S. and international investors in securities litigation and portfolio monitoring. With 200 lawyers in 10 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For the third consecutive year, the Firm ranked first in both the total amount recovered for investors and the number of shareholder class action recoveries in ISS's SCAS Top 50 Report. Robbins Geller attorneys have shaped the law in the areas of securities litigation and shareholder rights and have recovered tens of billions of dollars on behalf of the Firm’s clients. Robbins Geller not only secures recoveries for defrauded investors, it also implements significant corporate governance reforms, helping to improve the financial markets for investors worldwide. Please visit http://www.rgrdlaw.com for more information.