The $91.2 billion Ohio Public Employees Retirement System is suing Meta, previously known as Facebook, for securities fraud.
The pension fund claims that Meta misrepresented the safety of its platforms for vulnerable users, including children and teenagers, to its shareholders and the general public. OPERS said this resulted in harm to stock owners when whistleblower Frances Haugen, a former product manager at the social media company, emerged in September with a slew of internal documents revealing that the company was aware of the harmful effects of its platforms on its young users.
“Those documents show that Defendants were acutely aware that the products and systems central to Facebook’s business are riddled with flaws that sow dissention, facilitate illegal activity and violent extremism, and cause significant harm to users, but Facebook lacks the will or ability to correct them,” the OPERS complaint said.
In the wake of Haugen’s revelations, Facebook’s stock price declined by $54.08 per share, a fall of 14 percent. This amounted to a decline of more than $150 billion in Facebook’s total market capitalization by late October, according to the complaint.
OPERS filed the class action complaint on November 12 in the U.S. District Court in the Northern District of California.
The suit was filed on behalf of any investor who purchased or acquired shares of the Facebook “Class A” stock between April 29 and October 21. OPERS said it is suing the social media giant for misleading investors by making “materially false statements and omissions” about the effects of its platforms on its users. The pension fund argued that the omissions were part of a “scheme” to deceive the market and inflate the Facebook stock price during that period.
“All told, these disclosures erased more than $100 billion in shareholder value and subjected Facebook to immense reputational harm,” the fund wrote in its class action complaint.
The pension fund is seeking, on behalf of itself and all Class A investors, monetary compensation for the losses as a result of the alleged actions by the defendants — which include Meta, chief executive officer Mark Zuckerberg, chief financial officer David Wehner, and vice president for policy and global affairs Nick Clegg — and reimbursement of attorneys’ fees.
In late October, the Washington Post reported that a second Facebook whistleblower had come forward, echoing Haugen’s claims in her testimony before Congress. According to the report, the anonymous second whistleblower filed an affidavit with the Securities and Exchange Commission, alleging that Facebook repeatedly mitigated efforts to fight the harm and misinformation present on its platforms. The affidavit went on to allege that Meta has “failed to adequately address dangerous and criminal behavior on its platforms, including Instagram, WhatsApp, and Messenger,” the report said.