A predominate lawsuit made public this hebdomad accuses Facebook ’s board of agreeing to overpay the Federal Trade Commission one thousand million of dollars in exchange for not personally suing chief executive officer Mark Zuckerberg over the2018 Cambridge Analytica information leak malicious gossip .
“ … 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 open to personal liability , or even necessitate to sit for a deposition , ” record the complaint filed by Rhode Island ’s pension fund , which has since been consolidated with two other shareholder complaints . They specifically incriminate the ship’s company of overpaying by agreeing to square off for $ 4.9 billion more than Facebook ’s maximum penalty , were the case to go through legal legal proceeding ( which could leave Facebook vulnerable to discovery and a guilty supplication ) .
The FTC has not publicly disclosed its allege intention to action Zuckerberg in person . The agency did not yet respond to a request for comment .
Photo: Kevin Dietsch (Getty Images)
The suit drag from documents related to the FTC settlement , which ajudge orderedFacebook to wrench over to Rhode Island ’s pension investment trust in the first place this year . While most of the information they hold is under seal and redacted , and much has been antecedently reported , it partly affirm some long - held suspiciousness about the village .
“ There were rumour about the amount [ of the FTC settlement ] , ” Kint told Gizmodo over the phone .
Kint had want more elaborated resolution about who at Facebook know what , and when , about the Cambridge Analytica news leak , in which the datum of some 50 million Facebook users set down in the hand of the political consultancy through improper way . But when the news of the$5 billion FTC settlementand a little - hash out $ 100 million SEC settlement arrived at the same time , he ’d worried that he ’d never get answers . Prior to the settlement , Kinttestifiedbefore 14 state ’ sevens at the International Grand Committee hearing on Big Data , Privacy and Democracy in 2019 , stating that despite Facebook ’s habitual apologies , “ the companionship has repeatedly refused to have its CEO pop the question evidence to compress external governments want to need smart questions , entrust lawmakers with many unreciprocated interrogative . ”
An example of the heavy redactions within the suits against Facebook, its executives, and board members.Screenshot: Gizmodo/Delaware Court
“ [ The SEC closure ] was kind of done through a public press press release at the same time that the five billion dollar bill lawsuit happened , ” Kint said . “ Why that amount of money ? That ’s a Brobdingnagian bit without any changes in leading . ”
After the FTC investigated Facebook over Cambridge Analytica , the complaint read , board minute show that Facebook refused to settle unless the FTC allow Zuckerberg personally off the hook . The record 2019 mulct eventuallyamounted to $ 5 billion , which , the complaint imply , could have been Zuckerberg ’s policy money :
… Zuckerberg , Sandberg , and other Facebook directors agreed to clear a multi - billion settlement with the FTC as an express pound pro quo to protect Zuckerberg from being named in the FTC ’s complaint , made capable to personal liability , or even required to sit for a deposit .
On July 24 , 2019 , the SEC and Facebook announced a colonisation in which Facebook would make up $ 100 million to resolve an investigation into its misleading financial statement about the Cambridge Analytica breach . That same day , the FTC annunciate that Facebook had fit in to yield a record - countersink $ 5 billion as part of a settlement that let in wholesale going for Zuckerberg and Sandberg ( who were not name as suspect ) .
It ’s unclear how a hypothetical negotiation would have go . But after a lengthy blacked - out section , the ailment continues :
This was the key consequence in the negotiations where FTC staff consent the quid pro quo that Facebook provide : it would reserve Zuckerberg to get away but only if Facebook paid billion more than its maximal statutory photo .
The liquidation was the largest in FTC account . Despite that , it still fellfar shortof a meaningful punishment for a company that made three time that amount in the first quartern of that yr alone . After the FTC announced the resolution , congressional Democratscondemned the decisionto not view as Zuckerberg in person accountable .
Facebook did not react to Gizmodo ’s postulation for scuttlebutt .
The suit , which detail Facebook ’s alleged imbroglio and cover song - ups in stunning item and duration , largely rehashes in public reported information . It accuses , for lesson , Zuckerberg and others of ignoring obligation to shareholders by flouting responsibility over data and privateness and incurring “ immense reputational harm ” that ’s smart its market crown . It starts with a 2012 understanding Facebook made with the FTC to be transparent about share data with third parties . Two year later , it notes , Facebook turned around and structure its business around surreptitious third - party memory access to troves of user data , leading to the Cambridge Analytica malicious gossip .
The New York Timesreportedin March 2018 that at least one employee at Thiel ’s company Palantir aid parse the data and that Zuckerberg did n’t ensure that Cambridge Analytica delete the datum . From the complaint :
Zuckerberg and Sandberg also allowed Facebook ’s media relations staff to mislead journalists by claiming , incorrectly , that Facebook was investigating Cambridge Analytica ’s usage of Facebook substance abuser data and had discovered no evidence of wrongdoing . at long last , Zuckerberg and Sandberg both signed false and misleading SEC filing in which Facebook falsely tell investor that “ our users ’ data may [ emphasis theirs ] be improperly accessed , used or disclosed ” without disclosing that this risk was not supposititious but , in fact , had already materialized .
Previous national communications released by the Washington , DC , Attorney General ’s Office revealed that Zuckerberg was made aware of the Cambridge Analytica leak as far back as 2015 . Facebookemployeesasked that the company help oneself them investigate the “ sketchy ” company . The complaint proceed :
By December 2015 , Facebook also became aware that Cambridge Analytica was using secret Facebook information to help Senator Ted Cruz ’s campaign .
Rather than taking action to verify that Kogan and Cambridge Analytica had destroyed the data , Facebook but request that they delete the personal user information Facebook allowed to be disclosed .
The suit also says that only 0.31 % of exploiter give permission for third party to partake in data provide to Cambridge Analytica . The information was originally pull in through a personality quiz on Facebook built by psychologist Aleksandr Kogan .
The suit then cash in one’s chips on to detail questionable board dealings — quoting Sheryl Sandberg , whoreportedlyberated Facebook ’s former chief security military officer , Alex Stamos , for throw them “ under the bus ! ” by lay out his findings on Russian incumbrance to the board .
It accuses Zuckerberg and Thiel of a reciprocally beneficial placement that ’s made Thiel buckets of money and helped Facebook grab more power . When Facebooklaunchedits stumbling stablecoin , Libra , in June 2019 , it drew in Stripe and Spotify ( two major Thiel investments ) , and , the ill say , allowed Thiel to “ expand his cryptocurrency holdings by conduct the $ 18 million Series A and $ 30 million Series B financial support for the Bitcoin loaner , BlockFi . ” As payback , it claim , Thiel , an adviser to former President Donald Trump , helped Zuckerberg informal up to the Trump administration . Thiel , it say , shaped Facebook ’s policy “ in a manner favorable to the Trump administration to help curry favour with that disposal . ”
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