A New Mexico Judge Just Hit Meta With A $25 Billion Penalty

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On Wednesday, October 21, 2026, Judge Francis Mathew of New Mexico’s First Judicial District in Santa Fe ordered Meta Platforms (NASDAQ:META) to pay the state $25 billion for misleading Facebook users about their privacy in the Cambridge Analytica case. The order is far larger than the $5 billion fine the Federal Trade Commission imposed in 2019 over the same scandal.

The company is appealing. Meta has paid nothing; the money stays tied up, and interest keeps accruing until the appeal is decided.

Shares rose about 2% to $707.81 in afternoon trading after the ruling but faded to close at $697.52, up 0.47%. Third-quarter earnings, not the ruling, drove the after-hours gain of 2.16% to $712.61. The question is whether growing legal bills change the case for a company still growing revenue 26%.

How 43 Million Violations Became a $25 Billion Order

On September 25, jurors found 26 of 29 statements by the company and its leaders misleading. They counted each statement once for every Facebook user or New Mexico resident who saw it, which produced more than 43 million violations of state consumer protection law.

State law allows up to $5,000 per violation. Mathew found more than $219 billion justified but cut it, and all of the money goes to New Mexico schools.

At the October 1 hearing, state lawyer Randi McGinn asked for $35 billion to $40 billion, saying, “This court should speak to Meta in the only language it understands, which is money.” Meta Platforms asked for a $3.45 billion cap, arguing the state never proved any consumer was misled. The judge’s number is much closer to the state’s request.

Why “Core Business Practices” Raises the Stakes

Mathew wrote that the conduct “goes to the heart of Facebook’s core business practices” and that “Facebook promised users that they (the users) controlled their data. This was false.” He found that the company’s “most senior leadership,” including CEO Mark Zuckerberg and former COO Sheryl Sandberg, misrepresented its data privacy practices.

That language links the finding to the business model and to the top executives. An appeals court will have a harder time narrowing it, and lawyers in other states can cite it in their own cases.

Chief legal officer C.J. Mahoney said Meta is “confident we will prevail on appeal.” Attorney General Raúl Torrez called it “one of the largest, if not the single largest state verdict against a company in American history.”

Legal Costs Are Becoming a Recurring Expense

Torrez sued in 2021 after Cambridge Analytica collected data from as many as 87 million users. Earlier in 2026, New Mexico won $942 million from Meta in two trials over child exploitation and safety claims.

Meta’s third quarter also included a $9.89 billion charge for a separate matter: the August agreement with 52 attorneys general over teen mental health, which provides for payments of up to about $18.59 billion. The New Mexico ruling came after the quarter closed, and Meta has not said whether or when it will book the charge.

The penalty equals about 2.5 times third-quarter net income of $9.86 billion. D.A. Davidson analyst Gil Luria said, “Meta is worth nearly two trillion dollars, and will likely continue to appeal these cases and drag them out.”

What the $25 Billion Order Means for META Stock

The legal costs look manageable for Meta because third-quarter revenue reached $64.60 billion, and a company with an after-hours market value of about $1.78 trillion can absorb a $25 billion order that is still under appeal.

The risk is that the cases keep multiplying and legal costs permanently reduce margins. Even so, an ad business growing that fast can pay those bills.

Check Meta’s next quarterly filing for any money set aside for New Mexico, and watch whether shares close below $658.49, where they started 2026. A close under that level would mean investors see legal costs as more than a routine expense, and this view would be wrong.

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