Ohio AG lawsuit accuses Facebook of misleading shareholders • The Register
Facebook was sued Tuesday by Ohio Attorney General Dave Yost for allegedly deceiving shareholders about the potential harm its social media platform has inflicted on young users.
The complaint [PDF] was filed on behalf of the state’s largest pension fund, Ohio Public Employees Retirement System, and all other investors who acquired Facebook shares between April 29 and October 22 of this year.
Facebook founder Mark Zuckerberg, CFO David Wehner and vice president of global affairs and communications (and former UK deputy prime minister) Nick Clegg have also been listed as accused.
This is the latest federal securities fraud lawsuit to hit Facebook, also known as the Meta for reasons of laundering the company’s reputation.
Whistleblower and ex-employee Frances Haugen obtained and disclosed internal documents which, on the one hand, indicated that the social media giant had optimized its algorithms to keep users hooked to its platform, even though doing so was detrimental to the mental health of some Internet users.
The data also showed how ineffective Facebook’s AI content moderation systems were at eliminating misinformation, toxic hate speech and violent videos. Illicit activities such as drug trafficking and human trafficking have also gone unnoticed.
The documents led to a series of news articles dubbed The Facebook Papers, an effort led by the Wall Street Journal and other publishers. Haugen presented the evidence and testified before US lawmakers in Congress and before UK MPs. The files are also referenced in the Ohio lawsuit.
“Facebook has said it takes care of our kids and takes out online trolls, but in reality it is creating misery and division for profit,” Yost said in a statement. “We are not people for Mark Zuckerberg, we are the product and we are used against each other out of greed.”
Suddenly, it feels like 2010 again.
The complaint claims Facebook has repeatedly told investors it has “the most robust set of content policies in existence” to prevent the spread of fake news and harmful content. But documents leaked by Haugen revealed that Facebook knew its social media empire was “riddled with flaws that sow dissension, facilitate illegal activity and violent extremism, and cause significant harm to users,” according to the lawsuit.
“Despite this knowledge, Facebook has chosen to maximize its profits at the expense of the safety of its users and the general public, exposing Facebook to serious damage to reputation, justice and finances,” according to the complaint. The onslaught of bad press caused the company’s shares to fall by more than 14%, wiping out more than $ 150 billion in Facebook’s value, the lawsuit continued.
Dave Yost of Ohio wants to turn the case into a class action lawsuit on behalf of investors affected by the loss. He believes that Facebook should pay damages and that shareholders should be compensated.
“This lawsuit is without merit and we will defend ourselves vigorously,” said a spokesperson for Meta. The register in a report.
A similar lawsuit was filed by a shareholder in the eastern district of New York last month. ®