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Facebook ordered by the U.S. judge to turn over the privacy of data records

(Reuters) – A U.S. judge has ordered Facebook Inc. shareholders of e-mails and other data about how the social media company deals with data privacy, after the data for 87 million users was accessed by the British political consulting firm Cambridge Analytica.

FILE PHOTO: An attendee takes a photo of a board during the Facebook Inc. F8 developers conference in San Jose, California, USA, April 30, 2019. REUTERS/Stephen Lam/File Photo

In a 57-page decision on Thursday, which followed a one-day trial in March, Vice-Chancellor Joseph Slights of the Chancery Court of Delaware said shareholders demonstrated a “credible basis” to believe Facebook board members may have committed misconduct related to data privacy are violated.

Slights noted that Facebook had at the time of the 2015 Cambridge Analytica violation were subject to a Federal Trade Commission consent decree requires strengthening of the data security measures. The battle was not revealed until March 2018.

“The data on a trial basis, a credible basis to infer of the board of directors and Facebook senior executives failed to monitor Facebook’s compliance of the consent decree and the broader efforts for the protection of the personal data of its users,” Slights wrote.

Shareholders sued Facebook in September last year to obtain data with respect to Cambridge Analytica and other violations, and said that the finding of misconduct, they may sue the management of the company and of the directors by means of a so-called derivative lawsuit.

Derivative lawsuits are brought on behalf of the companies, with the money recovered from officers and directors, or their insurers, the companies themselves.

Facebook declined to comment on Friday. Daniel Rehns, a lawyer for the shareholders, declined to comment.

Facebook share sank 19%, wiping out $120 billion in shareholder value, the last 26 of July after the Menlo Park, California company posted disappointing results in the first quarter since the Cambridge Analytica breach was revealed, and said that it was spending more on security measures.

Cambridge Analytica, hired by the AMERICAN President Donald Trump’s 2016 election campaign, used profiling techniques to predict and influence the behavior of voters.

The exit after the break was announced, and several AMERICAN and European regulatory probes in Facebook followed.

Facebook Chief Executive Mark Zuckerberg told a U.S. Senate panel in April 2018, the company discovered the Cambridge Analytica failure in 2015, but not performed an audit nor told users and the FTC, Slights wrote.

Slights denied some of the shareholders’ record requests are over broad.

In a footnote, he said that his decision is stopped “far” to conclude that Facebook officers or directors engaged in misconduct, and that such a provision is “wait one more day.”

The case is in re Facebook Inc. Section 220 Litigation, Delaware Chancery Court, No. 2018-0661.

Reporting by Jonathan Stempel in New York; Editing by Bernadette Baum

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