Court Orders Facebook to Produce Board Communications
Delaware's Court of Chancery partially granted a stockholder's demand for records tied to Facebook's 2019 FTC settlement.
Updated on Nov. 3, 2026 in Public Companies
On February 10, 2021, Vice Chancellor Slights of the Delaware Court of Chancery granted in part and denied in part a stockholder's Section 220 demand for Facebook books and records. The ruling concerns documents related to the company's July 2019 FTC settlement over the unauthorized release of user data to Cambridge Analytica.
Why it matters
The stockholder sought the records to investigate whether Facebook overpaid to protect its CEO from personal liability. The ruling shows how Delaware courts can compel disclosure of board-level communications even when privileged materials are excluded.
The order compels production of electronic communications between board members about the FTC settlement, while privileged documents on the same negotiations were not required. The source provides no monetary figures for the settlement or for the documents ordered produced.
The players
Facebook is a social media company whose 2019 settlement with the Federal Trade Commission over user data released to Cambridge Analytica is at the center of this stockholder demand.
Cambridge Analytica
Cambridge Analytica was a political consulting firm that received unauthorized Facebook user data, the release that prompted the FTC settlement.
The details
Facebook agreed to produce certain categories of documents but refused to hand over electronic communications among board members about FTC negotiations and privileged materials. The court directed production of the board communications and did not require the privileged documents the stockholder sought.
Timeline
July 2019: Facebook settled with the Federal Trade Commission over the Cambridge Analytica data release.
February 10, 2021: Vice Chancellor Slights issued the post-trial order on the stockholder demand.
Market Landscape
The Facebook settlement with the FTC over the Cambridge Analytica data release set the backdrop for this shareholder challenge. The ruling places board-level deliberations over that settlement within reach of stockholder inspection in Delaware.
Shareholders of public companies incorporated in Delaware can use books-and-records demands to obtain internal board communications when they allege mismanagement. The ruling shows the limits of that access, since privileged materials remain protected.
The takeaway
Delaware stockholders may obtain board-level communications through books-and-records demands even when a company resists, though privileged legal advice stays protected. Investors tracking governance disputes should watch how these rulings shape future demands on public boards.
Further reading
For related coverage, see Public Companies in the Delaware business news section.
Source note: This article includes information reported by Aoshearman.
