Monday 23 July 2018

Facebook investors sue as shares drop €50bn

Stock Image: REUTERS
Stock Image: REUTERS

Facebook investors are suing the social media giant following revelations of a major data breach that has sent its shares plummeting by almost €50bn.

The world's most powerful social network is in the midst of a crisis after it emerged that data firm Cambridge Analytica had improperly used data from 50 million Facebook users to target US voters in the 2016 election.

US court filings show that shareholders now want to sue the business over "significant losses and damages" as a result of the scandal, which has seen the group's value drop $60bn (€48bn) in just two days.

Fan Yuan, the investor who filed the suit on behalf of those who bought shares in Facebook between February 2017 and March 2018, claims the technology company has made "materially false and misleading statements" and alleges that it violated its own data privacy policies by allowing a third party to access personal data. The document does not disclose the number of shareholders but says there could be "hundreds or thousands" involved.

The investors are being represented by US law firm Pomerantz, which in 2014 acted for shareholders suing BP over the collapse of its share price following the Gulf of Mexico oil spill.

The move adds to the pressure on the firm since the scandal unfolded.

Irish Independent

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