Settlement reached in investors’ lawsuit against Meta CEO Mark Zuckerberg and other company leaders
A settlement was announced Thursday in court in a class action investors’ lawsuit against Meta CEO Mark Zuckerberg and current and former company leaders over claims stemming from the privacy scandal involving the Cambridge Analytica political consulting firm.
The suit had sought billions of dollars in reimbursement for fines and legal costs. No details on the settlement were shared when it was announced in Delaware’s Court of Chancery at the start of what would have been the second day of trial, at which point nothing related to the settlement had been filed with the court.
The attorneys involved left court without commenting. A communications representative from Meta said the company had no comment.
Investors had alleged in the lawsuit that Meta did not fully disclose the risks to Facebook users that their personal information would be misused by Cambridge Analytica, a firm that supported Donald Trump’s successful Republican presidential campaign in 2016. Shareholders say Facebook officials repeatedly violated a 2012 consent order with the Federal Trade Commission under which Facebook agreed to stop collecting and sharing personal data without users’ consent.
Facebook later sold user data to commercial partners in direct violation of the consent order and removed disclosures from privacy settings that were required under consent order, the lawsuit alleged.
Facebook agreed to pay a $5.1 billion penalty to settle FTC charges in the fallout. The social media giant also faced significant fines in Europe and reached a $725 million privacy settlement with users.
Shareholders wanted Zuckerberg and others to reimburse Meta an estimated $8 billion or more for the FTC fine and other legal costs.
Zuckerberg and former Chief Operating Officer Sheryl Sandberg had been expected to testify. Other current and former board members, including billionaires Marc Andreessen and Peter Thiel, were also included as defendants.
Earlier this year, Sandberg was sanctioned for deleting emails from her personal account related to the Cambridge Analytica investigation. Jeffrey Zients, who served as an outside director from 2018 to 2020, avoided sanctions in the same case because his role made it less likely he had access to relevant information.
Testifying on the first day of this lawsuit, Zients said he had supported the FTC settlement for which shareholders were seeking reimbursement.
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