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Ohio AG accuses Facebook of securities fraud for misleading investors

Mark Zuckerberg is the Chairman and CEO of Facebook. He testified at an hearing held by House Financial Services Committee, Washington, on October 23rd 2019.

Erin Scott | Reuters

Meta was formerly called FacebookInvestors have brought new charges against the company for false statements it made about the damage its products could cause.

Ohio Attorney General Dave Yost filed the suit alleging that Facebook misled people about the potential negative impact its apps have on children’s well-being. Yost brought the suit as a federal class-action lawsuit on behalf of an Ohio pension fund and other Facebook investors.

This is the final case disclosures from former Facebook employee Frances HaugenHe gave a treasure trove of documents that contained internal research to Congress and the Securities and Exchange Commission. These documents showedFacebook did research on the psychological impact that its Instagram app has had on teenagers and concluded that the social media platform worsened the body of one-third of the teens.

Facebook countered, pointing out the positive effects its services can have for users. They also claimed some of those results from the study regarding mental health had been misinterpreted. However, many parents and legislators felt Facebook needed to do more to mitigate harm and make the experience better for their users.

Meta spokesperson said that the suit was “without merit”, and added, “We will defend ourselves vigorously.”

According to the lawsuit, CEO Mark ZuckerbergCompany officials and others made false statements concerning the safety and security aspects of their services. The Ohio Public Employees Retirement System, OPERS and other investors lost over $100 billion because of the decline in Facebook stock’s value since first published documents.

Yost wants to recover the value lost and requires Facebook to alter its methods to avoid misleading the public.

According to the complaint, Facebook has made misleading statements about its intentions to the media and its website. It cites comments made by Zuckerberg during the first quarter earnings call. He allegedly “downplayed” concerns that Facebook’s algorithm could amplify controversial content. Zuckerberg claimed that Facebook’s procedures were “quite solid” and stated, “We try to reduce extremist material.”

Yost was involved in antitrust litigations against Facebook and other states. Even though a judge dismissed the complaint by the states earlier this year in court, the plaintiffs remain unopposed. indicatedThey plan to appeal against the decision. Similar proceedings are being brought against them by Federal Trade Commission.

Yost joined 43 other general attorneys in calling on Facebook to stop plans to create an Instagram version for children. The company eventually said that it would. pauseThey are preparing for the future.

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Mike Robinson
Mike covers the financial, utilities and biotechnology sectors for Street Register. He has been writing about investment and personal finance topics for almost 12 years. Mike has an MBA in Finance from Wake Forest University.