Facebook Inc.’s failure to safeguard privacy was blamed in an investor lawsuit for a slump in its share price that followed the revelation users’ data were harvested without permission by a research firm connected to U.S. President Donald Trump.
The world’s largest social media network was sued in San Francisco federal court on Tuesday by shareholders who said they suffered losses after the disclosure that Cambridge Analytica, a U.K.-based firm that aided Trump, improperly obtained profile information on 50 million users.
The proposed class action would represent people who bought shares of Facebook from Feb. 3, 2017, when Facebook filed its annual report and cited security breaches and improper access to user data, through March 19, two days after a New York Times report revealed how data from Cambridge Analytica obtained through Facebook was used without “proper disclosures or permission.”
Throughout that period, “defendants made false or misleading statements and failed to disclose that Facebook violated its own data privacy policies by allowing third parties access to personal data of millions of Facebook users without their consent,” according to the complaint.