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posted by martyb on Friday September 24 2021, @02:31PM   Printer-friendly

Facebook paid FTC $4.9B more than required to shield Zuckerberg, lawsuit alleges:

In a newly unsealed lawsuit, Facebook shareholders allege that the company intentionally overpaid a $5 billion Federal Trade Commission fine to protect CEO Mark Zuckerberg from further government scrutiny.

"Zuckerberg, Sandberg, and other Facebook directors agreed to authorize a multi-billion settlement with the FTC as an express quid pro quo to protect Zuckerberg from being named in the FTC's complaint, made subject to personal liability, or even required to sit for a deposition," the lawsuit says (emphasis in the original). An early draft of the order obtained by The Washington Post through the Freedom of Information Act shows that the commission was considering holding Zuckerberg responsible.

The FTC levied the fine in July 2019 in the wake of the Cambridge Analytica scandal, which saw political operatives harvesting the personal data of 50 million Facebook users without their consent. (The lawsuit says only 0.31 percent of the affected users consented.) The fine (which was a record for privacy-related penalties) was 50 times larger than the maximum prescribed by a previous FTC consent decree, the lawsuit alleges. It was also well in excess of the previous record fine of $168 million.

"Facebook's maximum monetary exposure was $104,751,390—about $4.9 billion less than it agreed to pay," shareholders said in the lawsuit. The overpayment, they said, is a breach of fiduciary duty.

The lawsuit also alleges that, by withholding information about the Cambridge Analytica leak, executives and board members, including Zuckerberg and COO Sheryl Sandberg, engaged in insider trading. "After Zuckerberg learned of Cambridge Analytica's massive extraction of Facebook user data, he and the entities controlled by him significantly accelerated his sales of Facebook shares," the lawsuit says.

The shareholders filed the lawsuit in Delaware's Court of Chancery. Among the plaintiffs are a handful of pension and retirement funds, including the massive California State Teachers' Retirement System, which manages over $250 billion. The defendants include Mark Zuckerberg, Facebook COO Sheryl Sandberg, several other executives, and members of the board at the time of the settlement, including Peter Thiel, Mark Andreessen, and Jan Koum, among others.

A second lawsuit, which has been consolidated with the first, also names Palantir Technologies, Thiel's big data analytics firm. That lawsuit alleges tight ties between Palantir and Cambridge Analytica, citing a 2019 book by whistleblower Christopher Wylie. Wylie reported that several Palantir employees, including one of the company's lead data scientists, routinely worked at Cambridge Analytica's offices "in person, during normal business hours," the lawsuit says. "The two companies were so intertwined that, as the Stanford Daily reported in April 2018, Palantir earned itself the moniker 'Stanford Analytica.'" Palantir reportedly took steps to obscure the relationship.

Thiel was one of former President Donald Trump's biggest supporters in the run-up to the 2016 election. The Trump campaign and Trump-aligned PACs both hired Cambridge Analytica to help run digital operations.


Original Submission

Related Stories

Meta Says $725M Deal Ends All Cambridge Analytica Claims; One State [New Mexico] Disagrees 4 comments

https://arstechnica.com/tech-policy/2023/03/meta-says-725m-deal-ends-all-cambridge-analytica-claims-one-state-disagrees/

Tomorrow is the day that Meta expected would finally end its Cambridge Analytica woes. That's when a US district court in California is scheduled to preliminarily approve a $725 million settlement agreement that Meta believed would release the company of all related claims.

However, just days before Meta could reach that seeming finish line, the state of New Mexico has moved to intervene. In a court filing yesterday, New Mexico argued that Meta might be interpreting its settlement agreement wrong and claimed that, for New Mexico citizens, the Cambridge Analytica scandal is far from resolved.

To clarify whether Meta's agreement releases New Mexico's and others' claims and to ensure that the California court doesn't "inadvertently or otherwise release claims" raised in New Mexico's still-pending parallel action against Meta, New Mexico's attorneys have asked to be heard "briefly" at tomorrow's hearing.
[...]
[Update: A Meta spokesperson told Ars, "The attorneys representing New Mexico misstated our position, which we will explain to the Court."]

Previously:
Meta Settles Cambridge Analytica Scandal Case for $725m
Facebook Agrees to Settle Cambridge Analytica Lawsuit
Facebook Paid FTC $4.9B More than Required to Shield Zuckerberg, Lawsuit Alleges
Facebook Sued Over Cambridge Analytica Data Scandal


Original Submission

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  • (Score: 0) by Anonymous Coward on Friday September 24 2021, @03:03PM

    by Anonymous Coward on Friday September 24 2021, @03:03PM (#1181125)

    Why not? It's not Zuck's money so spend it. See former President for another example. Ooooh, Presidential. Zux will like that comparison. +5 Insightful

  • (Score: -1, Spam) by Anonymous Coward on Friday September 24 2021, @04:43PM

    by Anonymous Coward on Friday September 24 2021, @04:43PM (#1181160)

    "Zuckerberg, Sandberg, and other Facebook directors"

    A gaggle of Jews at Facebook...

    FTFY

  • (Score: 5, Interesting) by shortscreen on Friday September 24 2021, @04:53PM

    by shortscreen (2252) on Friday September 24 2021, @04:53PM (#1181161) Journal

    FTC took $5B to stop sniffing around.

    Shareholders are unhappy because they think the bribe didn't directly benefit them.

    LOL

  • (Score: 5, Insightful) by Opportunist on Friday September 24 2021, @06:22PM (11 children)

    by Opportunist (5545) on Friday September 24 2021, @06:22PM (#1181187)

    He bribed a government facility to stop investigating him?

    And they took it?

    • (Score: 4, Interesting) by Ox0000 on Friday September 24 2021, @06:49PM (10 children)

      by Ox0000 (5111) on Friday September 24 2021, @06:49PM (#1181196)

      It's more akin to the phrase: "The company agreed to pay USD X without having to admit guilt"; which is maddening at worst, and condescending at best.

      It just screams "the corporations own the government", see if you can do the same in your discussions with your car insurer, next time they give you a ticket:
      You: I paid the fine and do not have to admit guilt, right? Just like Facebook?
      Insurer: Nah mate, paying the fine admits guilt explicitly, we're jacking up your insurance cost!

      • (Score: 2) by Opportunist on Friday September 24 2021, @08:37PM (4 children)

        by Opportunist (5545) on Friday September 24 2021, @08:37PM (#1181231)

        The company agreed to pay USD X without having to admit guilt

        That reads like bribery to my ears. You legalized that?

        Screw Ferengi, you're ahead of them.

        • (Score: 2, Informative) by Anonymous Coward on Friday September 24 2021, @11:35PM (3 children)

          by Anonymous Coward on Friday September 24 2021, @11:35PM (#1181278)

          You may not like it, but the way this works is straight forward: When the money goes into government coffers, the government does not consider that a bribe. The government only considers it a bribe when the money goes into the pocket of a government worker.

          • (Score: 2) by Opportunist on Saturday September 25 2021, @07:54AM (2 children)

            by Opportunist (5545) on Saturday September 25 2021, @07:54AM (#1181357)

            In other words, the government, its functions, checks, laws and regulations, are for sale.

            Did I already mention the Ferengi?

            • (Score: 0) by Anonymous Coward on Saturday September 25 2021, @03:24PM (1 child)

              by Anonymous Coward on Saturday September 25 2021, @03:24PM (#1181398)

              What you said does not follow what he said. There is no personal gain here, which is why your Ferengi comparison falls on its face.

              • (Score: 2) by Opportunist on Saturday September 25 2021, @09:02PM

                by Opportunist (5545) on Saturday September 25 2021, @09:02PM (#1181444)

                That's the part that bothers you? Not that it's legal to buy a government investigation away?

      • (Score: 5, Touché) by Azuma Hazuki on Friday September 24 2021, @10:21PM (4 children)

        by Azuma Hazuki (5086) on Friday September 24 2021, @10:21PM (#1181255) Journal

        And yet every time I point out that things like this essentially mean government IS business and vice-versa at this point (with optional Mussolini quote...) I get shouted down.

        --
        I am "that girl" your mother warned you about...
        • (Score: -1, Troll) by Anonymous Coward on Saturday September 25 2021, @12:11AM

          by Anonymous Coward on Saturday September 25 2021, @12:11AM (#1181287)

          By who? Khallow alone cannot shout you down, as you far outshout him.

        • (Score: 2, Troll) by Anonymous Coward on Saturday September 25 2021, @03:13AM (2 children)

          by Anonymous Coward on Saturday September 25 2021, @03:13AM (#1181306)
          Yet you've been up-modded. How is that being shouted down?
          • (Score: 1, Funny) by Anonymous Coward on Saturday September 25 2021, @05:32AM (1 child)

            by Anonymous Coward on Saturday September 25 2021, @05:32AM (#1181336)

            You just don't understand Critical Lesbian Theory.

            • (Score: -1, Troll) by Anonymous Coward on Sunday September 26 2021, @02:26PM

              by Anonymous Coward on Sunday September 26 2021, @02:26PM (#1181579)

              Women's rights are victimhood and victimhood are women's rights

  • (Score: 3, Informative) by Lester on Saturday September 25 2021, @02:13PM

    by Lester (6231) on Saturday September 25 2021, @02:13PM (#1181393) Journal

    A dollar a vote and Lady Justice uses wads of dollars as weights for the balance.
    It is a very old government system, the ancient Greek named it plutocracy.

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