Powerful California Teachers Pension Fund Joins Lawsuit Against Facebook

The hits just keep coming for Facebook, as a major pension fund has joined a lawsuit against the beleaguered social media giant. That Cali Lifestyle The California State Teachers’ Retirement System has joined a derivatives lawsuit against Facebook’s leadership, including Chairman and CEO Mark Zuckerberg. The lawsuit was originally filed by the $478 million Fireman's Retirement System of St. Louis and retail investor Karen Sbriglio, and has now been joined by the CalSTRS pension, valued at $241.3 billion. The lawsuit seeks corporate governance reform from Facebook to protect its profitability and strengthen its long-term value, which is all a way of saying the lawsuit seeks to make sure the tech giant remains a sound investment. Long-Term Concerns There’s a reason that major pension funds, many of which are invested in Facebook, are a bit concerned about the company’s long-term health. Following the company’s Cambridge Analytica data scandal, Facebook’s stock price dropped $119 billion —the largest single-day loss in market history. Arguing the company’s missteps in recent years have hurt its bottom line, CalSTRS is pushing for board independence and diversity, as well as proportionate voting rights for shareholders that ensure greater accountability for the company, adding that weak governance practices lead to the data breach in the first place. New York State of Mind CalSTRS wants to rein in Facebook’s leadership, but New York state Comptroller Thomas DiNapoli wants to go even further. DiNapoli controls New York State Retirement Fund, which holds more than $1 billion in Facebook shares. He wrote a letter to Zuckerberg calling for the company to replace him as board chair, after a shareholder proposal to break up Zuckerberg’s dual role as Facebook CEO and chair didn’t pass. It Keeps Coming This has just not been a good summer for Facebook. It’s been blasted for hiring contractors to listen to user’s audio, it is about to undergo an antitrust investigation from the Federal Trade Commission and has been been forced to adopt an independent privacy committee of directors on the company’s board, it’s under fire for not doing enough to block gun sales, and even its co-founder thinks it needs to be broken up. At this point, it qualifies as good news for the company when the FTC’s $5 billion fine is viewed as not as bad as it could be. -Michael Tedder Photo by Adobe Read More...