Latest news with #JeffreyZients
Toronto Sun
2 days ago
- Business
- Toronto Sun
Settlement reached in investors' lawsuit against Meta CEO Mark Zuckerberg and other company leaders
Published Jul 17, 2025 • 2 minute read Former Meta board member and former White House Chief of Staff Jeffrey Zients, left, exits the Leonard L. Williams Justice Center after testifying in a shareholders' lawsuit against current and former Meta leaders on Wednesday, July 16, 2025, in Wilmington, Del. Photo by Mingson Lau / AP WILMINGTON, Del. — A settlement was announced Thursday in court in a class action investors' lawsuit against Meta CEO Mark Zuckerberg and current and former company leaders over claims stemming from the privacy scandal involving the Cambridge Analytica political consulting firm. This advertisement has not loaded yet, but your article continues below. THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLY Subscribe now to read the latest news in your city and across Canada. Unlimited online access to articles from across Canada with one account. Get exclusive access to the Toronto Sun ePaper, an electronic replica of the print edition that you can share, download and comment on. Enjoy insights and behind-the-scenes analysis from our award-winning journalists. Support local journalists and the next generation of journalists. Daily puzzles including the New York Times Crossword. SUBSCRIBE TO UNLOCK MORE ARTICLES Subscribe now to read the latest news in your city and across Canada. Unlimited online access to articles from across Canada with one account. Get exclusive access to the Toronto Sun ePaper, an electronic replica of the print edition that you can share, download and comment on. Enjoy insights and behind-the-scenes analysis from our award-winning journalists. Support local journalists and the next generation of journalists. Daily puzzles including the New York Times Crossword. REGISTER / SIGN IN TO UNLOCK MORE ARTICLES Create an account or sign in to continue with your reading experience. Access articles from across Canada with one account. Share your thoughts and join the conversation in the comments. Enjoy additional articles per month. Get email updates from your favourite authors. THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK. Create an account or sign in to continue with your reading experience. Access articles from across Canada with one account Share your thoughts and join the conversation in the comments Enjoy additional articles per month Get email updates from your favourite authors Don't have an account? Create Account The suit had sought billions of dollars in reimbursement for fines and legal costs. No details on the settlement were shared when it was announced in Delaware's Court of Chancery at the start of what would have been the second day of trial, at which point nothing related to the settlement had been filed with the court. The attorneys involved left court without commenting. A communications representative from Meta said the company had no comment. Investors had alleged in the lawsuit that Meta did not fully disclose the risks to Facebook users that their personal information would be misused by Cambridge Analytica, a firm that supported Donald Trump's successful Republican presidential campaign in 2016. Shareholders say Facebook officials repeatedly violated a 2012 consent order with the Federal Trade Commission under which Facebook agreed to stop collecting and sharing personal data without users' consent. This advertisement has not loaded yet, but your article continues below. Facebook later sold user data to commercial partners in direct violation of the consent order and removed disclosures from privacy settings that were required under consent order, the lawsuit alleged. Facebook agreed to pay a $5.1 billion penalty to settle FTC charges in the fallout. The social media giant also faced significant fines in Europe and reached a $725 million privacy settlement with users. Shareholders wanted Zuckerberg and others to reimburse Meta an estimated $8 billion or more for the FTC fine and other legal costs. Zuckerberg and former Chief Operating Officer Sheryl Sandberg had been expected to testify. Other current and former board members, including billionaires Marc Andreessen and Peter Thiel, were also included as defendants. Earlier this year, Sandberg was sanctioned for deleting emails from her personal account related to the Cambridge Analytica investigation. Jeffrey Zients, who served as an outside director from 2018 to 2020, avoided sanctions in the same case because his role made it less likely he had access to relevant information. Testifying on the first day of this lawsuit, Zients said he had supported the FTC settlement for which shareholders were seeking reimbursement. — Associated Press reporter Barbara Ortutay in San Francisco contributed to this report. Toronto & GTA Toronto & GTA Tennis MMA World
Yahoo
2 days ago
- Business
- Yahoo
Meta Trial on Privacy Scandal Features Tech, Politics A-List
(Bloomberg) -- Behind-the-scenes details of an agreement between Facebook and US privacy regulators in 2019 emerged in a Delaware court Wednesday, during a trial on investor claims the settlement cost them at least $7 billion. The Dutch Intersection Is Coming to Save Your Life Advocates Fear US Agents Are Using 'Wellness Checks' on Children as a Prelude to Arrests LA Homelessness Drops for Second Year Manhattan, Chicago Murder Rates Drop in 2025, Officials Say A company director at the time, Jeffrey Zients, who was later former President Joe Biden's chief of staff, said the board asked its lawyers to approach the Federal Trade Commission with a proposal. The company, now known as Meta Platforms Inc., was willing to pay billions of dollars to settle allegations related to a privacy scandal but would not accept any settlement that held founder Mark Zuckerberg personally responsible. Board members 'felt it was important to get this behind us so we could focus on growth,' Zients said on the first day of an eight-day trial in Delaware Chancery Court. They believed Zuckerberg, as CEO, was essential to the business and 'there wasn't any indication' he personally had anything to do with the privacy missteps related to political consulting firm Cambridge Analytica, he said. A parade of Silicon Valley celebrities is expected to testify in the Meta trial over the next two weeks, led by Zuckerberg. Others on the witness list include the company's former chief operating officer Sheryl Sandberg and prominent venture capital investors Marc Andreessen and Peter Thiel. Andreessen, who still sits on the company's board, is expected to testify Thursday. The investors contend directors of the company hurt share prices through actions tied to the decade-old incident that resulted in Cambridge Analytica acquiring data on millions of Facebook users. The data was used in work the firm did for the 2016 campaign to elect President Donald Trump to his first term. The suit alleges Meta directors engineered the company's $5 billion settlement with the FTC, overpaying to protect Zuckerberg from being held personally liable and to the detriment of shareholders. Meta representatives didn't immediately respond to a request for comment about Zients' testimony Wednesday. Zuckerberg's much-anticipated testimony is expected next week. The case is unusual because it's the first time that director-oversight claims involving a public company have gone to trial in Delaware Chancery Court, the premier venue for business disputes in the US. Other cases have been dismissed or settled. A group of pension funds who hold Meta shares allege Zuckerberg and Sandberg led Facebook to violate a 2012 Federal Trade Commission order covering data-sharing practices. Facebook directors also are accused of failing to properly monitor the platform's adherence to that order, according to court filings. Investors also accuse Zuckerberg of insider trading. The insider-trading claims prompted Zuckerberg to demand his stock-trading strategies be kept under seal in the trial. The tech titan moved to shield the price thresholds that trigger his automatic sales. The public can understand the allegations without that highly confidential information, he said in a court filing. In early 2018, Facebook executives admitted Cambridge Analytica had been allowed to improperly gather data about tens of millions of the company's users. Zuckerberg later apologized, acknowledging Facebook must better safeguard users' information. A year later, the FTC announced the settlement over violations of the order under which Facebook would pay the $5 billion fine. Investors, including pension funds, filed suit in the wake of that order. The case was filed as a derivative lawsuit, one that allows investors to sue company executives or board members on behalf of the company itself. Any recovery will go back to the company rather than any individual shareholder. Zuckerberg, the 41-year-old CEO and chairman of Meta's board, controls about 61% of the company's voting power through a dual-class share structure, effectively granting him sole control over the board composition and corporate strategy — past, present and future. Repeated investor efforts to raise concerns about corporate governance have fallen flat due to his concentrated voting power. Bloomberg Intelligence If Meta's unable to knock out this case ahead of trial, it theoretically could face a $2 billion settlement, The trial is being overseen by Chancellor Kathaleen St. J. McCormick – the same judge who rejected Tesla Inc. CEO Elon Musk's $55 billion pay package. That ruling and a handful of others — part of a court crackdown on insider conflicts of interest — prompted several companies to shift their states of incorporation to Nevada and Texas, including Tesla and Bill Ackman's Pershing Capital. They cited alleged judicial bias against tech leaders such as Musk and Zuckerberg. The wave of exits from Delaware, which funds more than a quarter of its budget with billions in corporate fees, led to a major overhaul of the state's best-in-class corporate laws earlier this year. The changes were drafted by an expert panel that included former judges now practicing law at firms linked to Musk and Zuckerberg, including one involved in the Cambridge Analytica case. Meta officials have publicly said they are weighing whether to yank their incorporation papers out of Delaware, which is the corporate home to more than 60% of Fortune 500 companies. Firms come to Delaware to get access to chancery court, where sophisticated business judges hear cases without juries. Last week, a venture capital firm co-founded by Meta director Andreessen cited a creeping pattern of uncertainty about how the law applies to startups and tech firms to explain its decision to relocate to Nevada. The case is IN RE Facebook Inc. Derivative Litigation, 2018-0307, Delaware Chancery Court (Wilmington). --With assistance from Riley Griffin, Michael Leonard, Jennifer Kay and Kurt Wagner. (Updates with additional Zients testimony.) How Starbucks' CEO Plans to Tame the Rush-Hour Free-for-All Forget DOGE. Musk Is Suddenly All In on AI How Hims Became the King of Knockoff Weight-Loss Drugs The Quest for a Hangover-Free Buzz Thailand's Changing Cannabis Rules Leave Farmers in a Tough Spot ©2025 Bloomberg L.P.
AU Financial Review
3 days ago
- Business
- AU Financial Review
Meta trial on privacy scandal begins with tech, politics A-list
Behind-the-scenes details of an agreement between Facebook and US privacy regulators in 2019 emerged in a Delaware court, during a trial on investor claims the settlement cost them at least $US7 billion ($11 billion). A company director at the time, Jeffrey Zients, who was later former US president Joe Biden's chief of staff, said the board asked its lawyers to approach the Federal Trade Commission with a proposal. The company, now known as Meta, was willing to pay billions of dollars to settle allegations related to a privacy scandal but would not accept any settlement that held founder Mark Zuckerberg personally responsible.
CNA
3 days ago
- Business
- CNA
Trial begins as Meta investors try to recoup $8 billion over privacy claims payout
WILMINGTON, Delaware :Facebook's board was not trying to protect founder Mark Zuckerberg in 2019 when it agreed to pay a $5 billion regulatory fine to resolve claims over its privacy practices, but was instead focused on growth, a former company director testified on Wednesday. Jeffrey Zients, White House chief of staff under President Joe Biden and a Meta Platforms director for two years starting in May 2018, was the first defendant to take the stand on Wednesday in the $8 billion non-jury trial before Kathaleen McCormick, chief judge of the Delaware Chancery Court. Facebook changed its name to Meta in 2021. Zients testified that the Federal Trade Commission initially sought "tens of billions of dollars" but was willing to accept $5 billion and the company felt it was important to reach a deal that did not name Zuckerberg as a defendant. "There was no indication he did anything wrong," Zients told the court. He said Zuckerberg was a "driving force" as chief executive for the company and "it was important he continued in that role." The trial began on Wednesday and is scheduled to last until July 25. A group of Meta shareholders, mostly union pension funds, allege Zuckerberg and former Chief Operating Officer Sheryl Sandberg ran the company as an illegal data harvesting operation and the board completely ignored their duty to oversee top management. Shareholders want McCormick to order the 11 defendants to reimburse Meta for more than $8 billion in fines and legal costs that Facebook paid to resolve claims that it had violated users' privacy in violation of a 2012 agreement with the Federal Trade Commission. The case was brought following revelations that data from millions of Facebook users was accessed by Cambridge Analytica, a now-defunct political consulting firm that worked for Donald Trump's successful U.S. presidential campaign in 2016. Other defendants include venture capitalist and current board member Marc Andreessen as well as former board members Peter Thiel, Palantir Technologies co-founder, and Reed Hastings, co-founder of Netflix. A lawyer for the defendants, who have denied the allegations, declined to comment. The defendants have said in court filings that Facebook was the victim of Cambridge Analytica's "deceit." McCormick, the judge who last year rescinded Elon Musk's $56 billion Tesla pay package, is expected to rule on liability and damages months after the trial concludes. On Wednesday morning, Neil Richards of Washington University Law School, an expert for the plaintiffs, described what he called "gaps and weaknesses" in the company's privacy program. But under cross-examination, Richards acknowledged that he could not say if the company had violated the 2012 agreement with the FTC - a central claim to the case. Meta, which is not a defendant, declined to comment. On its website. The company has said it has invested billions of dollars into protecting user privacy since 2019. The lawsuit is considered the first of its kind to go to trial that alleges that board members consciously failed to oversee their company. Known as a Caremark claim, such lawsuits are often described as the hardest to prove in Delaware corporate law. Four months ago, Delaware lawmakers overhauled the state's corporate law to make it harder for shareholders to challenge deals struck with controlling shareholders like Zuckerberg. The bill, which did not address Caremark claims, was drafted after the state's governor met with representatives of Meta. Andreessen Horowitz, the venture capital fund co-founded by Andreessen, said this month it was reincorporating in Nevada from Delaware and encouraged other companies to do the same. The company cited the uncertainty of the state's courts and referenced the Musk pay ruling.
