Meta investors sue Mark Zuckerberg for $8B over claims tied to Cambridge Analytica scandal

Meta investors filed a lawsuit against company CEO Mark Zuckerberg and other executive staff, both current and former, on Wednesday, with some of the claims of the suit citing the political consulting firm Cambridge Analytica, and the scandal that took place in 2018 where it was revealed Facebook users' personal information was being misused and Meta, then-Facebook, was in violation of the Federal Trade Commission (FTC) regulations.

2

The investors claim that Meta didn't fully inform them of the risks associated with Facebook users' personal information being misused, which resulted in the company having to pay a $5.1 billion penalty to the FTC, along with facing significant fines in Europe amounting to a $725 million privacy settlement.

The investors behind the lawsuit are now demanding that Zuckerberg and other former and current leadership reimburse the company for the fines it had to pay, which the suit claims total as much as $8 billion, including legal fees.

Neil Richards, a professor at Washington University Law School and the first trial witness, testified on Monday morning on behalf of the shareholders, saying, "Facebook's privacy disclosures were misleading." Additionally, in a later testimony, Jeffrey Zients, who served on Facebook's board between 2018 and 2020, said consumer privacy and user data were meant to be handled by Facebook's management and board.

Moreover, when asked if the board considered making Facebook's founder, Mark Zuckerberg, a party to the settlement, he said Zuckerberg was "essential" to running the company, but "there was no indication that he had done anything wrong."

Testimonies are scheduled to take place from both sides all through to late next week, and will include testimonies from Zuckerberg, former Chief Operating Officer Sheryl Sandberg, along with other witnesses such as board member Marc Andreessen and former board member Peter Thiel. The judge isn't expected to make a decision on the case for several months.

Prior to these first testimonies, Meta pushed for the Supreme Court to dismiss the case, with justices hearing arguments from the company on why it should be dismissed back in November. However, the high court dismissed Meta's appeal to have the case dismissed, and now it is going forward with due process.

A Meta spokesperson at the time said the company was disappointed by the decision of the court, saying the plaintiff's (Meta investors) claims were "baseless" and that Meta will continue to defend itself in this case as it is considered by the District Court.

The scandal caused by Cambridge Analytica could result in even more untold amounts of money pouring from Meta's coffers, but this time it would be from the leadership that was in control of the company at the time the violations took place.