Alphabet sued over failing to disclose Google+ privacy vulnerability

Posted:
in General Discussion
An investor has launched a lawsuit against Google's parent company, Alphabet, arguing that the company deceived fellow investors by failing to reveal a Google+ bug that could have exposed profile information people didn't set to public.

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The complaint, launched by a lawyer for plaintiff Adam Wicks, charges that Alphabet executives "repeatedly made materially false and misleading statements regarding the security failure affecting users' personal data," particularly through two 10-Q filings with the U.S. Securities and Exchange Commission in April and July. Those documents insisted that there had been "no material changes" to risk, including security breaches, since the end of December -- in reality, the bug was only quietly fixed the following March.

The 10-Qs should have indicated that "damage to the company's reputation and operating results and loss of customers from this failure of the company's security measures were imminent and inevitable," the complaint says, adding that as a result of Alphabet's mistake, Wicks and others were hit by a "precipitous decline in the market value of the company's common shares."

The bug was only made public in a recent Wall Street Journal report. Within the following two days, Alphabet's stock price dropped by $67.75.

Referring to the Journal story, the Wicks suit asserts that Google even circulated an internal memo warning that disclosing the bug would draw "immediate regulatory interest."

The case is being handled through the U.S. District Court for the Northern District of California, and names Alphabet CEO Larry Page, Google CEO Sundar Pichai, and Google CFO Ruth Porat as additional defendants. The executives have been issued a summons, and have 21 days to respond.

Google is planning to shut down Google+ in August 2019. The measure is being taken both as a security measure and an admission that the social network has failed to gain much traction, with usage well short of rivals like Facebook and Twitter.

Comments

  • Reply 1 of 7
    Rayz2016Rayz2016 Posts: 4,556member
    Lawyers must have some sort of directory of folk who're happy to put their name on this sort of thing.

    Over to you, GoogleGuy!

    claire1watto_cobra
  • Reply 2 of 7
    There’s no sense to this lawsuit.
    gatorguy
  • Reply 3 of 7
    Rayz2016Rayz2016 Posts: 4,556member
    There’s no sense to this lawsuit.

    There is if you're a slick lawyer looking to make a fast buck.

    I wonder if the plaintiff even used Google+

    edited October 2018 watto_cobra
  • Reply 4 of 7
    xsmixsmi Posts: 127member
    There’s no sense to this lawsuit.
    I beg to differ. If I were an investor and a company did not disclose information they KNEW would impact stock, for said reason, I’d sue the bejesus out of them. Not only did they not disclose the breach, they filed investment paperwork saying there was nothing wrong. I’ve never signed up for a lawsuit and I’ve never sued anyone directly, but what they did was wrong, and it showed I. Their share price. 
    racerhomie3watto_cobra
  • Reply 5 of 7
    There’s no sense to this lawsuit.
    Please explain further.....
    watto_cobra
  • Reply 6 of 7
    gatorguygatorguy Posts: 20,277member
    xsmi said:
    There’s no sense to this lawsuit.
    I beg to differ. If I were an investor and a company did not disclose information they KNEW would impact stock, for said reason, I’d sue the bejesus out of them. Not only did they not disclose the breach, they filed investment paperwork saying there was nothing wrong. I’ve never signed up for a lawsuit and I’ve never sued anyone directly, but what they did was wrong, and it showed I. Their share price. 
    Wouldn't it have impacted the stock whether they disclosed it or not? (and there's articles and lawyers saying there was nothing that should have been disclosed anyway, it was a software flaw patched in the same month it was discovered and there was no obligation for any disclosure, tho I personally strongly disagree)

    You could make the argument that discussing it earlier when Facebook was still fresh in the news would have been even more impactful on the stock. From a purely investment perspective delaying served those investors better IMHO. Still I suspect the SEC is taking a hard look at it too. 

    In any event "bad Google"...
    edited October 2018
  • Reply 7 of 7
    claire1claire1 Posts: 494unconfirmed, member
    Funny how this will never get a "gate"......
    watto_cobrachasm
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