NEW YORK (Reuters) – Facebook Inc’s(FB.Oh and by the chief executive, Mark Zuckerberg, on Thursday won dismissal of an investor lawsuit accusing them of misleading investors about the potential impact of a privacy breach, at the purchase price of the shares, but the investor will have a chance to refile their case.
FILE PHOTO: Attendees walk past a Facebook logo during the Facebook Inc. F8 developers conference in San Jose, California, united states, April 30, 2019. REUTERS/Stephen Lam/File Photo
U. s. District court Judge Edward Davila in San Jose, California, said that the investors had failed to allege that Facebook, or their respective directors, officers, knowingly made false statements that led to investor losses.
Facebook and the lawyers for the investors could not immediately be reached for comment.
The class-action lawsuit, which was included in the scope of consolidation of multiple investor complaints have been lodged since last year, is also targeted Facebook’s chief organization officer Sheryl Sandberg and chief financial officer, David Wehner.
Investors are focusing on the privacy breaches, and for the first time in December 2015, and that the Cambridge Analytica, a Uk-based political consulting firm in order to gain access to data for an estimated 87 million Facebook users.
In March 2018, multiple media outlets reported that Facebook was still allowing third-parties access to user data, and the data of the Cambridge Analytica breach used in conjunction with the AMERICAN President when He’s campaigning. The reports have caused the market price of the company dropped more than 18 percent in two weeks.
In July of 2018, Facebook’s stock price once again fell sharply by nearly 19 per cent, immediately after the company revealed in its quarterly earnings report, the growth in the number of active users, it was slow, and overall sales were down.
The investors claimed in their lawsuit that Facebook and its executives made tens of statements downplaying the impact of the Cambridge Analytica leak, and are related to user’s privacy issues could have on the market price of the stock.
Davila, however, said on Thursday that it had failed to the company or any of their respective directors, officers, knowingly making a false statement. He pointed out that some of these were future predictions, and the rest were general expressions of optimism, which is generally not the basis for the company’s securities-fraud lawsuits.
The court gave the investors until Oct. 26 to file for a new version of their complaint, saying that it “may be, plaintiffs can be cured of their allegations, the alleged, among other things, certain facts, as to why the statements made by the individual defendants were falsely made.”
Facebook is a individual is faced with a national process of users adhere to the company’s liability under various state and federal laws and regulations for the admission of a third party, including, Cambrdige Analytica, in order to gain access to their data.
Reporting By Brendan Pierson in New York; Additional reporting by Jonathan Stempel; Editing by David Gregorio