Ohio accuses Meta of securities fraud and deceiving the public

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The attorney general’s lawsuit contends that Facebook’s actions cost investors

Ohio Attorney General Dave Yost is suing Meta, the company formerly known as Facebook, and accusing it of misleading the public about how it controlled its proprietary algorithm. The suit takes a two-pronged approach, claiming the company’s actions were aimed at boosting its stock and deceiving shareholders.

The lawsuit was filed on behalf of the Ohio Public Employees Retirement System (OPERS) and other Facebook investors. The complaint alleges that Facebook and its senior executives violated federal securities laws from April 29, 2021, through Oct. 21, 2021.

“This suit is without merit and we will defend ourselves vigorously,” Joe Osborne, a Meta spokesperson, told the Wall Street Journal.

Leaked documents

The alleged violation centers on revelations made by a former Facebook employee who leaked internal company research in late September. Those documents contended that the company was aware that Instagram was having a harmful effect on some teenaged girls.

"Facebook said it was looking out for our children and weeding out online trolls, but in reality was creating misery and divisiveness for profit," Yost said. "We are not people to Mark Zuckerberg, we are the product and we are being used against each other out of greed."

Yost cites a series of articles published in the Wall Street Journal that he says demonstrate Facebook’s priorities. The revelations triggered a congressional investigation and renewed calls in some quarters to break up the social media giant.

Statements called into question

Yost’s suit claims that Meta CEO Mark Zuckerberg and other company officials made statements about safety, security, and privacy on the platform that they knew were not true. The suit stated that Facebook admitted in those internal documents that it was “not actually doing what we say we do publicly."

In addition to charges that Meta deceived the public, the suit also charges that the revelations by the former employee ended up costing investors, including OPERS. The suit claims that the company’s action caused the stock to fall by more than $54 a share, costing investors $100 billion.

Yost’s lawsuit asks the court to order Meta to make good on those losses and to make significant reforms to ensure it does not happen again.

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