Part 2/6:
The crux of the case revolved around Facebook’s disclosures in its Securities and Exchange Commission (SEC) filings. The evaluation was centered on whether the company acted fairly towards its investors, particularly regarding known risks related to the Cambridge Analytica incident. Specifically, the inquiry considered if Facebook had downplayed the actual risks by framing them as hypothetical scenarios, thereby misguiding its investors.
This legal battle had escalated to the Supreme Court but has now effectively returned to the lower court’s (Ninth Circuit) ruling. The implications of this Supreme Court decision are significant, as it raises questions about the standard of transparency and disclosure expected from companies, particularly in the volatile tech sector.