Facebook Inc and its Chief Executive Mark Zuckerberg came winning a dismissal of an investor lawsuit alleging that they mislead the investors about the potential effect of a privacy violation on its stock price.
Though last Thursday ruling came in favor of Facebook but investors still have a right to file the case again against the social media giant.
The investors failed to prove that Facebook or any of its executives intentionally misstated that resulted in investors to face losses, said U.S. District Judge Edward Davila in San Jose, California.
The class action lawsuit was filed consolidating several complaints from investors lodged since last year and in addition to the company and its CEO, the lawsuit also targeted company’s chief financial officer David Wehner and chief organization officer Sheryl Sandberg.
In the lawsuit, the main point of focus of the investors was a 2015 privacy breach in which Facebook allowed British political consulting firm Cambridge Analytica an access to the data of about 87 million users of Facebook.
And in March 2018, the news from several media platforms, that data provided to Cambridge Analytica was used in campaign of U.S. President Donald Trump and the company is continue to be allowing third parties with an access to its user data, caused the Facebook’s stock price a downfall of more tha 18 percent within two weeks of surfacing those news.
Also in July 2018, after unveiling a slowed down growth in number of its active users and declining total revenues in its quarterly financial results, Facebook’s stock price again saw an immediate drop of about 19%.
The investors in their lawsuit claimed that Facebook as well as its executives made number of statements rejecting the idea of Cambridge Analytica and issues related to privacy breaches would made any effect on its stock price.
As per court’s ruling, investors can now file a new complaint until October 26.