Meta shareholders look to haul CEO Mark Zuckerberg, Sheryl Sandberg to court
87 comments
·July 15, 2025tptacek
marshray
It discusses HN-adjacent VCs, Delaware business law, and "Big Tech" and government regulation.
But, yeah, the $8B in question hardly seems existential to FB.
tptacek
Oh, yeah, no, I totally get why a serious lawsuit against Facebook execs would be on-topic for HN! I'm more asking, doesn't Facebook see a lawsuit like this like once a quarter?
marshray
Sorry, my personal information bubble is not calibrated to maintain a half-way-objective estimate on that.
Perhaps if we hang around here looking sad someone else will research the answer and tell us?
v5v3
Does Meta break a new law every quarter?
This suit is regarding a privacy order they failed to meet and the investors claim this led to the Cambridge Analytics affair. Not a once a quarter repeat event.
bawolff
IANAL, but this case sounds like the extremest of long shots to me. Does anyone who knows about this sort of thing have any idea how likely such a lawsuit is to suceede?
yogurtboy
Does anybody with knowledge of the process know if this can be a path to holding companies liable for the private data they save?
lcnPylGDnU4H9OF
You would have to be a shareholder (which you probably are if you have a 401k) and you would have to show that their decision to save and use private data has hurt their enterprise such that they would have been more profitable and/or grown more/faster had they not done so.
boringg
How many shareholders are leading this? It better not be someone who owns one share that they didn't even hold for that long....
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aaroninsf
I'm cynical enough to think that this, too, will result in a payout of some kind. Whatever it might be called.
Companies like this are too big to be held accountable. Every problem is soluble given their capitalization, the only consequence is irritation and fighting—usually among those already complicit and merely concerned that they didn't maximize their view—of interest to few.
Meanwhile, Rome is burning. Oh well.
v5v3
Meta are not involved.
Individuals directors are being sued, not the company
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lenerdenator
"We knowingly bought into a scheme where one man - the one we're suing - has 51% of the voting power on all corporate affairs. We think he screwed up and owes us money. Can you help us?" - the shareholders to the Delaware CoC, in effect.
Remember: the people who work for these shareholders - most of which are institutional investors, not individuals - went to exclusive schools and make more in bonuses than you will in a lifetime of work, at least if you're the average American.
gnopgnip
The company, board of directors still owes a fiduciary duty to minority shareholders. Having 51% of voting control doesn't change that.
philipov
If you don't like how a company is being managed, your recourse is to pull your investment.
gnopgnip
That wouldn't make the investors whole for past violations, which is why they are suing for breach of fiduciary duty.
phkahler
This. I think the executives have an obligation to state their plans so investors can decide if they want to back it. But if making top dollar is a requirement then lots of companies should liquidate and invest in other companies with higher returns or something.
v5v3
Activist investors have always been around.
They only pull their investments if they fail.
jncfhnb
You can also work collectively with other shareholders to directly impact the board
toast0
If a manager doesn't want to manage within the law for the benefit of shareholders, their recourse is to purchase all the shares.
elcritch
Can you cite case law for this opinion which would apply to a large public corporation during normal management?
bawolff
The idea that directors of a corporation have a fiduciary duty to the company is not controversial. See e.g. https://en.wikipedia.org/wiki/Board_of_directors#Duties
axus
I too would like be enlightened, I'm not a lawyer but I 'd like to feel smarter, knowing the names of some cases and what was decided.
The other comment's Wikipedia link had footnotes for "Percival vs Wright [1902]" and "Coleman v Myers [1977]", but these are UK and New Zealand cases.
For the US, https://en.wikipedia.org/wiki/Fiduciary#Fiduciary_duties_und... seems most appropriate wiki link but most of the footnotes were for analysis and not cases.
gnopgnip
Ervin v. Oregon Ry. & Nav. Co. 1886 and Rothchild v. Memphis & C.R. Co. 1902 would be some of the earlier cases
freejazz
Case law for the proposition that the company has a fiduciary duty to its shareholders? Here's a top google result for you: https://online.hbs.edu/blog/post/fiduciary-duty-to-investors
ajkjk
you're asking someone to cite case law for a random post on a forum?
newsclues
Is this fiduciary duty to make as much money as possible (who gets to decide what the max is), or just not to scam or steal from your investors?
mminer237
Essentially, yes, it's to increase stock value, but generally the courts are to defer to executives' judgment on such decisions as long as the executive is acting in good faith. So in practice you don't have to, like, exploit people or anything as long as you say not exploiting people is good for the long-term health of the company's good will or something.
v5v3
As per that article, it is said they failed to comply with a law. And complying with laws will be a given in most contracts.
Making money comes after complying with law and rules.
pbalau
Not sure what your point is, the Meta shares are doing great, hence Zuckerberg being in charge of things works.
barbazoo
From the second paragraph:
> The trial, set to begin Wednesday in Delaware’s Court of Chancery, aims to hold Zuckerberg, former Meta COO Sheryl Sandberg and other former executives personally liable for the billions the company spent to resolve allegations that it failed to safeguard user data.
jncfhnb
Stock being up doesn’t mean they’re not allowed to voice dissatisfaction
v5v3
Have you worked in this area?
I have worked with asset managers, employees come from all around the world and vary in background. Yes there will be a weighting to the more privileged kids but most of the jobs don't make big bonuses. That's just the Sales leads and funds managers.
But it's irrelevant. As the institutional investors who invest are doing so for their underlying investors e.g. Pension Funds.
The people suing, if win, will report higher results and their bonuses will be higher but so will the underlying investors.
palmotea
> Remember: the people who work for these shareholders - most of which are institutional investors, not individuals - went to exclusive schools and make more in bonuses than you will in a lifetime of work, at least if you're the average American.
So? What's your point? We should root for Zuckerberg because the people who are suing him are rich? Zuckerberg is an order of magnitude worse in all those resentment metrics you list than the people who are suing him.
lenerdenator
My point is that everyone involved is awful and that none of this should happen in a remotely sane society. What kind of corporate governance model allows for a dictatorship? Why aren't the shareholders just selling if they think they were wronged the better part of a decade ago?
Because we're insane.
Maybe they're filing the suit out of the fiduciary duty to their fund members. Worst-case scenario, it goes nowhere. Best-case scenario, they get money out of Meta. Now, they're doing this off the backs of the people of Delaware, but whatever.
orochimaaru
Not true. These are people who are likely responsible for global economic meltdowns and then asking for handouts (anyone remember 2008). Zuck isn’t making anyone’s life harder without them signing into his platforms. Just stay off of them if you don’t like zuck.
But you can’t stay off the financial system. So, creepy as zuck maybe, I think he is impact for evil is a whole lot less.
cindyllm
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SoftTalker
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MegaButts
There are so many reasons to hate Zuck. But bringing up something he said as a teenager in a private conversation is one of the dumbest reasons.
isx726552
It was a comment revealing his attitude towards what would soon become his customers in a globally-impactful business over which he has sole control. It’s more relevant than ever today.
pbalau
Is there any proof that he said that, apart the movie? I'm not arguing he didn't, but the only place I've found to support that is the movie. I didn't try very hard either...
nudgeOrnurture
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megous
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livid-neuro
megous
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dmix
This reminds me of the 2000s when the media was full of “terrorism experts” who were calling everything a terrorism risk. There’s a never ending supply of these experts for whatever topics currently in the news.
gcau
I disagree that it's a genocide, but if you're going to link a source showing it is, the United Nations, and/or the wikipedia page on the topic, would be better than a paywalled NYT article.
These kinds of suits are so common that directors and officers of large corporations all carry insurance against them --- is there something particularly notable about this suit?