Meta Platforms (META.O) successfully obtained a dismissal of a lawsuit alleging it misled shareholders by not disclosing the potential impacts of Apple’s (AAPL.O) privacy updates on Facebook and Instagram’s advertising appeal.
U.S. District Judge Yvonne Gonzalez Rogers dismissed the suit on Tuesday, which also included allegations that Meta hid former COO Sheryl Sandberg’s misuse of company resources for personal events and her book “Lean In.”
The judge, based in Oakland, California, further rejected claims that Meta’s shift to Reels, emulating TikTok’s format, detrimentally affected its revenue by offering fewer ads.
The lawsuit, initiated by four Israeli insurers and pension funds, claimed Meta made 17 misleading statements in 2021 and 2022, leading to a 53% stock price drop and a $500 billion loss in market value.
However, Judge Rogers in her 34-page ruling stated that Meta’s later acknowledgment of a potential $10 billion impact from iOS privacy changes in 2022 did not prove earlier disclosures false. She found the allegations about Sandberg relied solely on unverified press reports and saw no evidence that Reels impacted Meta’s finances negatively.
Rogers concluded there was no plausible claim of federal securities law violations and dismissed the lawsuit with prejudice, preventing it from being refiled.
Other defendants included Sandberg, CEO Mark Zuckerberg, CFO Susan Li, and former CFO David Wehner. Neither the plaintiffs’ lawyers nor Meta responded to comments immediately following the decision.
The case is officially titled Plumbers and Steamfitters Local 60 Pension Trust v Meta Platforms Inc et al, filed in the U.S. District Court for the Northern District of California, under case number 22-01470.
