The plaintiffs accused Facebook of misleading investors in violation of the Securities Exchange Act, asserting the company unlawfully withheld information regarding a 2015 data breach tied to Cambridge Analytica.
Justice Elena Kagan highlighted, "When we think about these questions, we're not looking only to lies or complete false statements; we're also looking to misleading statements or misleading omissions."
Facebook contended that it was not required to disclose the past data breach, arguing that a reasonable investor would interpret risk disclosures as forward-looking statements, rather than factual revelations.
Justice Samuel Alito remarked on the nature of risk evaluations, noting, "Isn't it the case that an evaluation of risks is always forward-looking? It is. And that's essentially what underlies our argument here."
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