Facebook's Shareholders Are Disappointed

Oh Facebook.

Everything, I like to say, is securities fraud. For instance, if you are a public company that suffers a massive data breach and exposes sensitive data about millions of customers without their consent, and that data is then used for nefarious purposes, and you find out about the breach, and then you wait for years to disclose it, and when you do disclose it your stock loses tens of billions of dollars of market value, then shareholders are going to sue you for not telling them earlier, and probably the Securities and Exchange Commission is going to look into it as well. (In fact the SEC recently issued guidance about when you have to disclose a data breach.) The underlying bad thing that you did -- not keep your data safe -- is just an input into a function whose result is "securities fraud."