Meta Sued: Failed to Warn Investors of Risks Associated with Apple Privacy Adjustments
On Tuesday, the Plumbers and Steamfitters Local 60 Pension Trust said in a securities lawsuit filed in federal court in San Francisco that Meta executives failed to notify shareholders during last year's earnings call that the company's efforts to offset financial losses were ineffective.
The trust said in the complaint:Â "Instead of being transparent with investors, Defendants painted a false and misleading picture of Meta's mitigation efforts to address iOS changes and rebuild Meta's advertising business model."
A spokeswoman for Meta declined to comment.
Apple made some tweaks last year that required app makers to ask users if they agreed to be tracked. The privacy change hit Meta's Facebook business, which relies heavily on user data to sell targeted ads. meta slammed Apple for the change last year and warned investors that it would hurt ad revenue.
But the trust said Meta executives "fully disclosed" the "significant headwinds" facing Meta's advertising business only after the company reported a poor Q4 earnings report, which led to an unprecedented 27 percent drop in Meta's stock the next day.
The trust said in its complaint that Meta's "misconduct and negligence" led to a "sharp decline" in its stock price, causing significant losses and harm to shareholders.