Rhode Island files lawsuit against Google over privacy breach
Rhode Island has filed a lawsuit against Google over their handling of a privacy breach that compromised the information of 52.5 million users and put a hole in Rhode Island's pension fund.
The lawsuit against Alphabet Inc., Google’s parent company, centers around a privacy breach with the social media platform Google+ and the company allegedly misleading shareholders and federal regulators by not disclosing it.
The company had a massive security breach in the spring, but held the news back, which the state claims, caused them to buy stock that was overvalued. General Treasurer Seth Magaziner estimates “ the financial harm that was caused by their failure to disclose in a prompt fashion was about 4.5 million dollars.”
He arrives at that figure by calculating how much the state overpaid for stock while the company withheld price depressing news.
“Anybody who bought shares of Alphabet Inc. during that period of time, was buying those shares at an inflated price, because that news had not come out yet,” Magaziner tells NBC 10.
The state is attempting to lead a shareholder class action lawsuit after Google’s actions negatively impacted the value of the shares and after the company allegedly hid vulnerabilities in their security measures.
“Google had an obligation to tell its users and investors that private information wasn’t being protected,” said Magaziner. “Instead, Google executives decided to hide the breaches from its users and continued to mislead investors and federal regulators.”
Google announced in October that they were shutting down Google+, and on Monday they announced that the personal information for 52.5 million users had been compromised.
“This is an unconscionable violation of public trust by Google, and we are seeking financial restitution on behalf of the Rhode Island pension fund and other investors,” said Magaziner.