> Investors allege that Meta did not fully disclose the risks that Facebook users’ personal information would be misused by Cambridge Analytica...
Anyone following this case and care to share their thoughts of how likely the plaintiffs are to prevail? Is the expectation that Meta will settle out of court?
"The only thing that the lower courts held [previously] is that Facebook can be liable if the statement, in context, was materially misleading. The investors, a bank and a public pension plan, are seeking compensation for the lost value of their stock.
My guess is that the justices will be frustrated by how little the issues on which the parties discuss in their briefs resemble the question they agreed to review. In an effort to offer something predictive about what we might see at the argument, I would point to two things. The first is a deep-seated skepticism of securities fraud litigation held by some of the justices, who tend to view litigation in this area as akin to extortion based on hindsight. The court has also issued a number of decisions in recent years in favor of corporate interests that have weakened federal regulators, including at the Securities and Exchange Commission.
On the other hand, it is a powerful benefit to the investors that the government filed a parallel suit against Facebook, contending that its disclosures about security breaches were insufficient; the government appears in full support of the investors and will share in their oral argument time. It similarly helps the investors that there is a forceful and direct friend-of-the-court brief signed by most of the most famous securities law scholars, arguing that the securities laws bar any kind of categorical exception for misleading statements made in forward-looking risk disclosures."
>Investors allege that Meta did not fully disclose the risks that Facebook users’ personal information would be misused by Cambridge Analytica, a firm that supported Donald Trump ’s first successful Republican presidential campaign in 2016.
The wording here is confusing. They did not disclose that ... someone else who got the info would do something bad?
From Matt Levine on his everything is securities fraud theory
An odd fact of the U.S. legal system for public companies is that every crime is also securities fraud: If a company does a bad thing, and regulators find out about it, then the bad-thing regulators can punish it for doing the bad thing, but the securities regulators can also punish it for not disclosing the bad thing to shareholders. . . . It is a strange combination: Generally speaking the companies do the bad things on behalf of shareholders—to make more money for them—but then the securities regulators come in and fine them for defrauding shareholders.”
The short version, as I understand it, is that Facebook said a leak "may" occur, but did not say a leak "would" occur, and investors interpreted that to mean would not occur. It seems really thin, but everything is securities fraud now.
1. It takes 4 of the 9 Justices to vote to take up a case. Given the current 6-3 split this likely means the conservative supermajrority voted to take the case. Why they then chose to dismiss it we can only speculate about;
2. The Supreme Court consistently sides with big business and this has likely been the case since its inception. This isn't strictly true but tends to be a good predictor of what cases the court takes and how it will rule;
3. SCOTUS is and always has been political. Supreme Court justices are political operatives;
4. This court will be inclined to side against Big Tech in general and social media in paritcular because of the war on the (implied right of) privacy and the pervasive myth that conservative voices are somehow being censored or silenced, despite lots of evidence that conservative rage-bait gets disproprotionately more distribution on recommendation algorithms.
One final piece of context regards the consequences of misuse of user data by the likes of Cambridge Analytica. Coming up soon is the potential ban of Tiktok. One argument for this is the influence of the Chinese government.
What you don't hear--from either party--is pushing for comprehensive user data protection legislation. So don't let any politican (of either party) tell you data privacy and protection is important to them. It is not. Or they would've done something about it.
I think I understand the CA scandal well, but how could it be reasonably expected for Facebook to give investors adequate notice that a third party could misuse their targeted ads feature (to my knowledge CA did not hack FB, they simply used targeted ads)?
It's as if expecting recently IPO'd Beyond Meat to disclose to investors the possibility that someone might choke on a meatball they make with the meat...
FB will settle out of court. Probably a third of what shareholders are asking. Lawyers get paid handsomely on both sides. Parent company has washed away the stink of Cambridge Analytica fallout (remember those bs “sorry” videos and newspaper ads? [1,2]). Shareholders get a pittance.
I’m a bit over this hyper-capitalistic market. When are C-level executives going to pay for their actions? Where is the jail time for these people?
Why should C-level execs pay for what was effectively a Russian think-tank exploiting a vulnerability in their developer platform? Should Tim Cook go to jail because Pegasus exists?
This whole thing has been blown way out of proportion. Facebook is easy to hate and the facts get lost.
> When people file a lawsuit, it is given due consideration because sending it down to the dumpster
Broadly speaking, our post-War system of laws puts consumers at the top. Right below them, investors. Way below them, workers.
If you engage the legal and regulatory system properly as a consumer, you can move mountains. Even without a lawyer. As an investor, you typically need a lawyer, but with that hurdle met you're similarly powerful. As a worker, the system seems to presume you're SOL on arrival.
> Broadly speaking, our post-War system of laws puts consumers at the top. Right below them, investors. Way below them, workers
> If you engage the legal and regulatory system properly as a consumer, you can move mountains. Even without a lawyer.
I have never heard someone claim that (which doesn't make it false). Almost everyone I interact with says the large investors and executives have far more power - and now far more power than ever. Companies trample on consumers and treat them like crap all the time - I don't know anyone who thinks consumers are powerful.
Use the legal system and you can end up buried in paperwork, discovery, and an unaffordable lawsuit that consumes many years of your life with no reliable outcome. Most people have to settle cases rather than fight deep-pocketed parties. Often you can't even get to court because of arbitration agreements, etc.
Who has done the things you claim? Is there some measure of how many?
> Broadly speaking, our post-War system of laws puts consumers at the top. Right below them, investors. Way below them, workers.
That is not true. Failure to pay employee salaries is a very easy way to pierce the corporate veil. It is not just you become another creditor like a consumer or a supplier would be.
> Failure to pay employee salaries is a very easy way to pierce the corporate veil
Legally, yes. Practically, many employers bounce paycheques and get away with it. It’s tedious to enforce worker rights in a way it isn’t for consumers. (In most states, you can get the AG basically working for you by copying their office on a complaint to the company.)
> Broadly speaking, our post-War system of laws puts consumers at the top.
This is a cool thing to believe, your stories about this must be fascinating.
What have been the differences between your personal experiences engaging in the regulatory system in the United States as a consumer versus the times you’ve engaged with the regulatory system in the US as an investor?
It's not funny, it's by design. Property owners and investors are usually given the most attention by courts because they matter more broadly speaking.
Matt Levine recently covered how it's much more lucrative/easy to sue Chipotle for skimping out on their portions from the investor/security fraud angle than it is the customer angle [1]
"Now, my caddie chauffeur didn't need to inform me that holding stock is where people put money that is properly invested, therefore a shareholder lawsuit involves the most heinous of crimes: Theft of money. And the others don't."
As I see this: the US is built on money. Money is the most valued thing. So if someone hurts your basic need of shelter food or water no one cares. If someone makes you lose money or makes your investment go bad the court will intervene. Although it might sound awful I don't think it is necessarily that way. I just wish it could be more balanced.
But then again, I'm a foreigner, I know nothing about the US.
Alternatively the Supreme Court wants to issue an ruling that says invading people's privacy for profit, or to provide it to political parties, is legal and therefore not subject to lawsuits or legal challenges in future.
> Alternatively the Supreme Court wants to issue an ruling that (...)
According to the article, the supreme court actually declined to issue a ruling in this case. Curious if that causes you to update your beliefs in any manner.
> Investors allege that Meta did not fully disclose the risks that Facebook users’ personal information would be misused by Cambridge Analytica...
Anyone following this case and care to share their thoughts of how likely the plaintiffs are to prevail? Is the expectation that Meta will settle out of court?
"The only thing that the lower courts held [previously] is that Facebook can be liable if the statement, in context, was materially misleading. The investors, a bank and a public pension plan, are seeking compensation for the lost value of their stock.
My guess is that the justices will be frustrated by how little the issues on which the parties discuss in their briefs resemble the question they agreed to review. In an effort to offer something predictive about what we might see at the argument, I would point to two things. The first is a deep-seated skepticism of securities fraud litigation held by some of the justices, who tend to view litigation in this area as akin to extortion based on hindsight. The court has also issued a number of decisions in recent years in favor of corporate interests that have weakened federal regulators, including at the Securities and Exchange Commission.
On the other hand, it is a powerful benefit to the investors that the government filed a parallel suit against Facebook, contending that its disclosures about security breaches were insufficient; the government appears in full support of the investors and will share in their oral argument time. It similarly helps the investors that there is a forceful and direct friend-of-the-court brief signed by most of the most famous securities law scholars, arguing that the securities laws bar any kind of categorical exception for misleading statements made in forward-looking risk disclosures."
https://www.scotusblog.com/2024/11/securities-disclosure-ove...
>Investors allege that Meta did not fully disclose the risks that Facebook users’ personal information would be misused by Cambridge Analytica, a firm that supported Donald Trump ’s first successful Republican presidential campaign in 2016.
The wording here is confusing. They did not disclose that ... someone else who got the info would do something bad?
From Matt Levine on his everything is securities fraud theory
An odd fact of the U.S. legal system for public companies is that every crime is also securities fraud: If a company does a bad thing, and regulators find out about it, then the bad-thing regulators can punish it for doing the bad thing, but the securities regulators can also punish it for not disclosing the bad thing to shareholders. . . . It is a strange combination: Generally speaking the companies do the bad things on behalf of shareholders—to make more money for them—but then the securities regulators come in and fine them for defrauding shareholders.”
The short version, as I understand it, is that Facebook said a leak "may" occur, but did not say a leak "would" occur, and investors interpreted that to mean would not occur. It seems really thin, but everything is securities fraud now.
Several thoughts:
1. It takes 4 of the 9 Justices to vote to take up a case. Given the current 6-3 split this likely means the conservative supermajrority voted to take the case. Why they then chose to dismiss it we can only speculate about;
2. The Supreme Court consistently sides with big business and this has likely been the case since its inception. This isn't strictly true but tends to be a good predictor of what cases the court takes and how it will rule;
3. SCOTUS is and always has been political. Supreme Court justices are political operatives;
4. This court will be inclined to side against Big Tech in general and social media in paritcular because of the war on the (implied right of) privacy and the pervasive myth that conservative voices are somehow being censored or silenced, despite lots of evidence that conservative rage-bait gets disproprotionately more distribution on recommendation algorithms.
One final piece of context regards the consequences of misuse of user data by the likes of Cambridge Analytica. Coming up soon is the potential ban of Tiktok. One argument for this is the influence of the Chinese government.
What you don't hear--from either party--is pushing for comprehensive user data protection legislation. So don't let any politican (of either party) tell you data privacy and protection is important to them. It is not. Or they would've done something about it.
I think I understand the CA scandal well, but how could it be reasonably expected for Facebook to give investors adequate notice that a third party could misuse their targeted ads feature (to my knowledge CA did not hack FB, they simply used targeted ads)?
It's as if expecting recently IPO'd Beyond Meat to disclose to investors the possibility that someone might choke on a meatball they make with the meat...
Yes, companies are legally obligated to disclose risks.
But that’s not even what this is about. Facebook _did_ disclose those risks, but just not strongly worded enough in the hopes of the plaintiffs.
FB will settle out of court. Probably a third of what shareholders are asking. Lawyers get paid handsomely on both sides. Parent company has washed away the stink of Cambridge Analytica fallout (remember those bs “sorry” videos and newspaper ads? [1,2]). Shareholders get a pittance.
I’m a bit over this hyper-capitalistic market. When are C-level executives going to pay for their actions? Where is the jail time for these people?
This country is a joke.
[1] https://m.youtube.com/watch?v=Q4zd7X98eOs
[2] https://mashable.com/article/facebook-newspaper-ad-apology
Why should C-level execs pay for what was effectively a Russian think-tank exploiting a vulnerability in their developer platform? Should Tim Cook go to jail because Pegasus exists?
This whole thing has been blown way out of proportion. Facebook is easy to hate and the facts get lost.
Remember all those years ago? Too big to fail, too big to jail. If you or I did the same things we'd be in jail.
Really funny how the US Court system becomes really interested in cases as soon as shareholders file a lawsuit.
When people file a lawsuit, it is given due consideration because sending it down to the dumpster.
> When people file a lawsuit, it is given due consideration because sending it down to the dumpster
Broadly speaking, our post-War system of laws puts consumers at the top. Right below them, investors. Way below them, workers.
If you engage the legal and regulatory system properly as a consumer, you can move mountains. Even without a lawyer. As an investor, you typically need a lawyer, but with that hurdle met you're similarly powerful. As a worker, the system seems to presume you're SOL on arrival.
> Broadly speaking, our post-War system of laws puts consumers at the top. Right below them, investors. Way below them, workers
> If you engage the legal and regulatory system properly as a consumer, you can move mountains. Even without a lawyer.
I have never heard someone claim that (which doesn't make it false). Almost everyone I interact with says the large investors and executives have far more power - and now far more power than ever. Companies trample on consumers and treat them like crap all the time - I don't know anyone who thinks consumers are powerful.
Use the legal system and you can end up buried in paperwork, discovery, and an unaffordable lawsuit that consumes many years of your life with no reliable outcome. Most people have to settle cases rather than fight deep-pocketed parties. Often you can't even get to court because of arbitration agreements, etc.
Who has done the things you claim? Is there some measure of how many?
> Broadly speaking, our post-War system of laws puts consumers at the top. Right below them, investors. Way below them, workers.
That is not true. Failure to pay employee salaries is a very easy way to pierce the corporate veil. It is not just you become another creditor like a consumer or a supplier would be.
> Failure to pay employee salaries is a very easy way to pierce the corporate veil
Legally, yes. Practically, many employers bounce paycheques and get away with it. It’s tedious to enforce worker rights in a way it isn’t for consumers. (In most states, you can get the AG basically working for you by copying their office on a complaint to the company.)
> Broadly speaking, our post-War system of laws puts consumers at the top.
This is a cool thing to believe, your stories about this must be fascinating.
What have been the differences between your personal experiences engaging in the regulatory system in the United States as a consumer versus the times you’ve engaged with the regulatory system in the US as an investor?
Elizabeth Holmes was only found guilty of ripping off investors with her fake bloodtests - the paying customers, no harm no foul.
It's not funny, it's by design. Property owners and investors are usually given the most attention by courts because they matter more broadly speaking.
Another reason is that the harm can often be quantified and remedy easily justified.
Matt Levine recently covered how it's much more lucrative/easy to sue Chipotle for skimping out on their portions from the investor/security fraud angle than it is the customer angle [1]
Unfortunate how that's just how the system works.
[1] https://archive.ph/mhEQA
"Now, my caddie chauffeur didn't need to inform me that holding stock is where people put money that is properly invested, therefore a shareholder lawsuit involves the most heinous of crimes: Theft of money. And the others don't."
(Futurama ref: https://www.youtube.com/watch?v=Ns8z1RYf9mM&t=1m11s)
As I see this: the US is built on money. Money is the most valued thing. So if someone hurts your basic need of shelter food or water no one cares. If someone makes you lose money or makes your investment go bad the court will intervene. Although it might sound awful I don't think it is necessarily that way. I just wish it could be more balanced.
But then again, I'm a foreigner, I know nothing about the US.
Alternatively the Supreme Court wants to issue an ruling that says invading people's privacy for profit, or to provide it to political parties, is legal and therefore not subject to lawsuits or legal challenges in future.
> Alternatively the Supreme Court wants to issue an ruling that (...)
According to the article, the supreme court actually declined to issue a ruling in this case. Curious if that causes you to update your beliefs in any manner.
But it’s much easier to comment immediately with my preconceived notions than to actually read the article and risk that it disagrees with them.