RI Sues Facebook's Zuckerberg Over Cambridge Analytica Scandal

PROVIDENCE, RI — The Employees' Retirement System of Rhode Island filed a lawsuit against Facebook CEO Mark Zuckerberg and other top executives over the Cambridge Analytica data-privacy scandal.

General Treasurer Seth Magaziner accused Zuckerberg, COO Sheryl Sandberg and members of the board of directors of allowing security breaches to Rhode Island residents' retirement funds and causing "significant damage" to Facebook investors residing in the state. Magaziner also criticized Facebook and its relationship with Cambridge Analytica. The British tech company obtained Facebook users' private information without their permission, and some of that data was used to promote former President Donald Trump's 2016 campaign.

Facebook agreed to pay the Federal Trade Commission a $5 billion fine, following the scandal. This harmed Facebook stockholders in the state, including the Employees Retirement System of Rhode Island, which currently holds 151,533 shares of Facebook, Magaziner said. The state's stock valued about $54.2 million based on Facebook's stock price at the close of trading Thursday, according to Yahoo Finance.

"As Treasurer, my job is to stand up for the financial wellbeing of all Rhode Islanders, including the teachers, first responders and other community servants who depend on the Rhode Island pension fund for their retirement security," Magaziner said in a statement on Friday. "When Facebook leaders improperly allowed user data to fall into the hands of bad actors trying to influence elections in support of Donald Trump and others, they not only put our democratic system of government at risk, they also put shareholder capital at risk."

Magaziner also urged Facebook to adopt an independent board chair, along with inadequate board governance, to prevent scandals like the Cambridge Analytica incident from happening again.

The complaint was filed in the Court of Chancery of the State of Delaware earlier this month. Magaziner said a public version of the complaint with redactions of confidential information will be filed on Aug. 6.