The IMF Bentham Ltd (ASX: IMF) share price is currently up 3.8% after announcing that it is funding a new representative complaint under the Privacy Act 1988 against Facebook for alleged breaches of the Australian Privacy Principles.
The company also said that a class action may follow.
For readers who may not be familiar with IMF, it’s one of the world’s leading global litigation funders, with its HQ in Australia but it also has offices in the US, Canada, Singapore, Hong Kong and London.
At the end of 31 December 2017, it had funded a 90% success rate across 166 completed cases (excluding withdrawals). The company has been working towards having a diverse portfolio of litigation funding assets.
IMF Bentham will finance this new investment with its Rest of the World funds, which is fund 2 and fund 3.
The complaint will be made against Facebook Australia and Facebook Inc and Facebook Ireland relating to Facebook users’ personal information being improperly shared with third parties.
I’m sure most readers will have heard how Facebook information was shared with Cambridge Analytica after the user, or one of their friends, did a Facebook survey called “This Is My Digital Life”.
The Australian Information Commissioner has also commenced a separate investigation into these matters.
The complaint is being handled by law firm Johnson Winter & Slattery in Sydney.
Is IMF a buy?
IMF has been a strong winner for shareholders since the start of 2016, with the share price up by 155% since 15 Jan 2016.
It’s hard to say how much money IMF may be looking for to make from this, but considering the 90% success rate it’s safe to say the company wouldn’t be pursuing this if there was little chance of success.
IMF isn’t my type of investment, but it could be a market-beater from here.
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Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Facebook. The Motley Fool Australia has recommended Facebook. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.