The US Supreme Court dismissed an appeal by Meta Platforms Inc., leaving it to face a lawsuit that accuses the company of misleading shareholders about the data-harvesting scandal involving political consulting firm Cambridge Analytica.
Investors claim the company, then known as Facebook, inflated share prices by failing to adequately disclose the risk that its user data would be misused. The shareholders say revelations about the scandal contributed to two 2018 price drops that cost the company more than $200 billion in market value.
Meta was asking the Supreme Court to reverse a federal appeals court decision that had let the lawsuit go forward. The court heard arguments on Nov. 6.
As is its usual practice, the high court didn’t provide any explanation for dropping the case, saying only that it was being “dismissed as improvidently granted.”
Business groups led by the Chamber of Commerce had urged the court to take up the case and side with Meta, saying that risk-disclosure allegations have contributed to a wave of meritless securities-fraud suits.
The Supreme Court is also considering an appeal by Nvidia Corp., which is being sued for allegedly misleading shareholders about its reliance on crypto-mining revenue in the run-up to a market crash.
The case is Facebook v. Amalgamated Bank, 23-980.
Photo: Photographer: Tiffany Hagler-Geard/Bloomberg
Copyright 2024 Bloomberg.
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