Rhode Island General Treasurer Seth Magaziner announced late last week that the Rhode Island retirement system is suing Facebook, and others personally, including Facebook co-founder, Mark Zuckerberg, alleging breaches of fiduciary duty in connection with Facebook’s collection of users’ private information that was obtained by Cambridge Analytica and misused for political purposes. Cambridge Analytica, a UK firm, had collected and otherwise accessed a treasure trove of personal information from Facebook users that was then used for targeted marketing and misinformation operations in a variety of political campaigns leading up to the 2016 US elections.
General Treasurer Magaziner is quoted in a press release as stating “[w]hen Facebook leaders improperly allowed user data to fall into the hands of bad actors trying to influence elections…they not only put our democratic system of government at risk, they also put shareholder capital at risk.” Facebook has previously agreed to pay a $5 billion fine to the Federal Trade Commission for the breach, and General Treasurer Magaziner is now alleging that this fine materially impacted the value of Facebook stock and harmed Facebook shareholders. It is reported that the RI retirement system currently holds 151,533 shares of Facebook.
While the lawsuit has already been filed in the Court of Chancery of the State of Delaware, it remains under seal and thus not yet publically accessible.