Facebook should have told investors about the scandal, says an investor.
- A Facebook shareholder is suing the company for allegedly misleading investors. The suit is seeking class action status.
- The investor claims that since Facebook did not inform shareholders about the Cambridge Analytica data scandal, the company omitted facts that have led to a decline in Facebook's value.
- Facebook has lost about $50 billion in market value since the scandal broke on Saturday.
A Facebook shareholder is suing the social media giant for allegedly misleading investors in the Cambridge Analytica affair that's currently rocking the social network.
Fan Yuan, who owns Facebook stock, filed a lawsuit Tuesday in the District Court of Northern California, located in San Francisco, on behalf of Facebook shareholders. Gizmodo first reported the lawsuit, which is seeking class action status. You can read the full complaint here.
On Friday, it was revealed that Trump-linked data company Cambridge Analytica, a United States-based subsidiary of UK-based firm SCL, had obtained as many as 50 million Facebook profiles by abusing Facebook's data sharing features. Since the scandal broke, the company's value has declined by about $50 billion.
The lawsuit claims that since Facebook knew about the issue for two years and failed to say anything publicly, it's at fault for not providing enough information to its investors — and, because of that, Facebook is liable for damages, it says.
"As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s common shares, Plaintiff and other Class members have suffered significant losses and damages," the lawsuit says.
Paul Grewal, Facbook's deputy general counsel, told Business Insider, “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.”
The Federal Trade Commission is looking to investigate the incident. And several lawmakers are increasing the pressure on CEO Mark Zuckerberg, who has been silent so far, to testify on the matter before Congress.
Yuan's lawyer has not responded to request for comment from Business Insider.
You can read the full complaint here:
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