Facebook, which now goes by the name Meta Platforms (NASDAQ: FB), faces a new lawsuit over allegedly misleading investors about the harmful impacts of its products on adolescent mental health.
As reported by CNBC, a federal class action suit was filed by Ohio Attorney General Dave Yost on behalf of the Ohio Public Employees Retirement System and other Facebook investors, alleging that the company withheld data from the public on the harmful impacts of social media on the mental wellbeing of youths. The latest lawsuit is based on a series of revelations made by former Facebook employee Frances Haugen, who unveiled internal research documents between Facebook, Congress, and the SEC about the link between Instagram use and the deterioration of body self-image among teen females.
In the suit, CEO Mark Zuckerberg and other company executives are being accused of violating federal securities laws by deliberately making inaccurate statements regarding the security and safety of its products. Yost cited one particular occasion where during the company’s first quarter earnings call, Zuckerberg supposedly downplayed worries that Facebook’s algorithm might magnify extremist content.
Yost points out that the pension fund and other investors lost a combined $100 billion after Facebook’s stock plummeted following the release of the controversial documents. Yost is looking to recoup those losses, as well as force Facebook to adjust its policies to avoid misleading investors going forward.
Information for this briefing was found via CNBC. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.