On December 20, 2021, the United States District Court for the Northern District of California dismissed a presumed class action lawsuit against a social media company and some of its executives under the Securities Act. In relation to Facebook, Inc. Sec. litig., 5:18-CV-01725-EJD, 2021 WL 6000058 (ND Cal. December 20, 2021). The plaintiffs claimed that the company made false statements regarding the data breach and regarding users’ control over their data. The court had previously dismissed the plaintiffs’ two previous complaints but granted leave to reconsider them. In addressing the plaintiffs’ third amended complaint, the court held that the plaintiffs still failed to provide an adequate complaint to the investigator for the allegations of data breach and causes of loss for the allegations of user data control, and therefore dismissed the lawsuit without permission to return the response.
In relation to the data breach allegations, the plaintiffs claimed that the company made false or misleading statements regarding the risks facing the company following the data breach and the results of the company’s investigation. Identification card. at 3 o’clock the court confirmed that the same complaint alleged that the entity responsible for the data breach asserted that it deleted the embezzled data; So the plaintiffs need to prove why the defendants should know that the certificates were fraudulent. Identification card. The court ruled that the plaintiffs’ allegations – that the company “embedded” three employees in a political campaign linked to the use of statements from the abuse – were still insufficient to establish a flag, as they failed to claim facts showing that “”the employees knew the testimony was fake or that they raised No such concerns for company executives. Identification card. At 4. Furthermore, the court dismissed the plaintiffs’ attempt to establish a scientist based on allegations that the company’s investigation revealed additional information about continued misuse of user data associated with the data breach, as the plaintiffs failed to adequately link company executives to the investigation or any specific facts. Information revealed through investigation. Identification card. in *5.
Regarding the contested statements about users’ control of their data – which the plaintiffs claimed was false because the company apparently continued to provide access to user data to certain third parties – the court explained that the plaintiffs failed to prove the cause of the loss because the alleged drop in a share price event The company is more than a month after public disclosure of the company’s alleged data access practices. Identification card. at *7. Based on this time gap, the court held that the plaintiffs had failed to establish the necessary link between the alleged corrective disclosure and the decline in the company’s stock price. Identification card.
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In relation to Facebook, Inc. Sec. litig.