Meta Platforms (NASDAQ:FB) stock is down more than 8% at the time of writing on a number of bearish news items for the company. Yesterday afternoon, a lawsuit accused Meta Chief Executive Mark Zuckerberg of being personally responsible for the 2016 Cambridge Analytica data breach. FB stock is also likely caught up in the tech-stock selloff taking hold of the markets today, after Snap (NYSE:SNAP) lowered its quarterly guidance.
On Monday, the Washington D.C. Attorney General, Karl Racine, filed a lawsuit against Zuckerberg. In the suit, Racine alleges Zuckerberg failed to oversee consumer data privacy, indirectly leading to the Cambridge Analytica scandal.
The Cambridge Analytica scandal refers to the infamous 2016 data leak that exposed millions of Facebook users’ data. The British consulting firm fraudulently collected user data on up to 87 million Facebook users. Racine alleges the leak was in fact an attempt to sway the 2016 election in favor of former President Donald Trump.
Racine commented on the nature of the accusations:
“This unprecedented security breach exposed tens of millions of Americans’ personal information, and Mr. Zuckerberg’s policies enabled a multi-year effort to mislead users about the extent of Facebook’s wrongful conduct. This lawsuit is not only warranted, but necessary, and sends a message that corporate leaders, including CEOs, will be held accountable for their actions.”
This is seemingly the latest update in the controversy.
This isn’t exactly Meta’s first comeuppance related to the Cambridge Analytica scandal. In 2019, the Federal Trade Commission fined the company $5 billion for the data leak.
The social media company has also faced international consequences for its role in the privacy breach. In January, the company was sued for more than $3 billion in damages in British court related to the 44 million U.K.-based users caught in exploitation.
Facebook may also be falling as part of a general selloff today. The tech-heavy Nasdaq is down 3.68% this morning after Snap lowered its quarterly forecast, citing a deteriorating macroeconomic environment. SNAP stock is down 40% at the time of writing, on track for its worst intra-day fall in its history. Snap’s fall has spurred a tech-stock slump, with Meta falling in tow.
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