Facebook "won" another lawsuit on Wednesday for violating federal legislation on securities (shares), something that emerges from internal documents revealed by the former employee Frances Haugen.
The lawsuit [PDF], which names CEO Mark Zuckerberg and CFO David Wehner as defendants, has been filed in the Eastern District of New York.
He claims that the company and its executives have repeatedly made false and misleading statements to investors over the past five years.
It all started when the Wall Street Journal published the first of nine articles with material provided by Haugen. The leaked corporate documents left Facebook trying to justify itself as other news organizations began publishing more than Facebook Papers.
The complaint, which aspires to be a class action lawsuit on behalf of those who bought shares in Facebook, claims that the social network:
- did not present the true development of its users.
- should have revealed how much growth came from double accounts.
- did not provide a fair platform for speech by providing VIP special treatment
- failed to adequately respond to drug cartels, human traffickers and violent organizations;
- and actively tried to attract pre-adolescence.
By not being honest with investors about such matters, the complaint alleges that Facebook violated the 1934 Securities Exchange Act.
The complaint, filed by shareholder Wee Ann Ngian, is based on Haugen's statements about how Facebook incites hatred, which has shown increased interactions in the company's measurements.
"Haugen reported that Facebook's algorithm optimizes content that generates more interaction," the complaint states. "This has led publishers to realize that if they produce more aggressive and divisive content, they will get more views."
"As a result of the revelations of October 3 and 4, Facebook's share price fell by $ 16,78 per share, or about 4,9 percent, from closing at $ 343,01 on October 1, 2021 (compared to 326,23 , $ 4 on October 2021, XNUMX) ", the complaint states.
"From the first WSJ article published on September 13, 2021, to the final revelation on October 4, 2021, Facebook stock prices fell by $ 55,45, or more than 14 percent, hurting investors."
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However, the revelations continued and Facebook, which announced the profits of the third party quarter 2021 last Monday, saw its share price fall further to $ 312,22 on Wednesday.