[ad_1]
Internal research showing Facebook’s awareness of the harm it does to children and its role in inciting violence and health misinformation worries investors like Julie Goodridge, portfolio manager at NorthStar Asset Management. He, along with the New York State Audit Office and other investment funds, presented a motion for the next shareholder meeting, calling for Mr. Zuckerberg’s mandate as majority shareholder to be removed.
“We take bad behavior very seriously, and it’s the kind of thing we believe will hurt the company in the long run,” said Ms. Goodridge.
Gary Gensler, who took over the SEC in April, said the agency should step up sanctions if companies fail to adequately disclose information that could affect investors. In its first months in office, the agency appears to be expanding its scope to include how corporate decisions have broader social, environmental and workforce impacts – the types of decisions that are a priority for some investors. It recently launched an investigation into allegations that gaming company Activision Blizzard failed to disclose sexual harassment allegations to investors.
“Traditionally, securities-fraud laws have been about stopping false or misleading statements on balance sheets – it would be commonplace,” said Kevin S. Haeberle, a professor at the William & Mary School of Law. “There is now a political approach and movement to use securities law more broadly.”
The company has recruited an army of attorneys from multinational law firms in Washington, including experts in securities, antitrust, consumer protection and civil rights law. And now he has years of experience fighting lawsuits by regulators, including the Federal Trade Commission and state attorneys general.
With a market capitalization of close to $1 trillion, Facebook faces regulatory penalties without much scarring, including a $100 million deal with the SEC to not disclose data privacy risks, and a record $5 billion deal with the FTC, both in 2019. was able to absorb.
Now, it will be up to the securities regulators to obtain the documents provided by Ms. Haugen and show clear violations of corporate governance laws. Donald Langevoort, a securities law expert at Georgetown Law School, said that without evidence of intent and recklessness, Facebook would have grounds to dismiss a lawsuit.
“The hard part is proving whether they really misrepresented the information or just framed it as opinion or inflating,” he said.
Contributed by reporting Mike Isaac, Sheera Frenkel, Ryan Mac and Davey Alba.
[ad_2]
Source link