it’s not for academic dishonesty, drugs, or violence. if you care enough to know what it is check my past threads.
I guess you can apply if you have really good stats and EC’s and you have a legitimate excuse for it to write about in your essays.
Are you out of the running? Nope. How much it damages your profile depends on how serious it is. “Privacy related issue” is kind of vague, so it is hard for me to guesstimate.