High Stakes: Facebook Faces Supreme Court in Securities Fraud Battle

The U.S. Supreme Court heard arguments in a case involving Meta's Facebook, which is accused of misleading investors about a data breach. The outcome could reshape securities fraud litigation. This follows a 2018 lawsuit after revelations that data from 30 million users was improperly accessed by Cambridge Analytica.

The U.S. Supreme Court convened on Wednesday to deliberate on a significant securities fraud lawsuit targeting Meta's Facebook. Shareholders have accused the social media giant of misleading them regarding improper data use, stemming from a contentious 2015 incident linked to Cambridge Analytica.

Facebook is appealing a previous court decision that allowed the lawsuit to proceed. At the crux of this legal battle is whether Facebook's failure to disclose a past data breach contradicted the Securities Exchange Act of 1934. The decision could impact how businesses disclose risks to investors in the future.

A ruling is expected by June, with the court also set to hear a related case concerning Nvidia. Both cases could potentially redefine the hurdles faced by private litigants seeking justice in securities fraud cases, amidst increased scrutiny of corporate transparency post-Cambridge Analytica breach.

(With inputs from agencies.)