Attorney General Ford Joins Bipartisan Coalition Urging Meta to Protect Users from Fraudulent Investment Ads

Carson City, NV — Today, Nevada Attorney General Aaron D. Ford joined a bipartisan coalition of 42 attorneys general in calling on Meta Platforms, Inc. (Meta) to protect people from fraudulent investment ads appearing on Facebook. In their letter to Meta, the coalition highlights the dangers of these ads and urges Meta to improve its process for reviewing ads before they appear on its platforms.

“Social media companies like Meta have a responsibility to protect their users, especially in today’s environment in which fraudsters and scammers are incredibly active and adaptive,” said AG Ford. “The pump-and-dump scams common on Facebook have impacted thousands of Americans all over the country, and I strongly urge Meta to take the appropriate actions to crack down on these ads and ensure their user base is not victimized.”

Scammers use fraudulent Facebook ads with images of well-known individuals, such as Warren Buffet, Cathie Wood and Elon Musk, to draw in users. However, the groups who run the ads are not affiliated with those individuals. The ads often boast about stocks with incredibly high returns for investors and some even offer free “consultations” or investment advice. When users click on the ads, they are prompted to join a WhatsApp group, where they are targeted in a pump-and-dump scheme.

In these pump-and-dump schemes, the scammers provide a series of recommendations to buy certain stocks. The prices of these stocks are then rapidly pumped up when they are purchased by the users. The fraudsters then profit from the price inflation by quickly selling, or “dumping” the securities at a high price, which in turn causes the prices to plummet. The new owner of the stocks typically loses a substantial part of their money when the security’s price falls. Pump-and-dump schemes are illegal and constitute securities fraud.

Despite Meta’s use of automated systems and occasional human review to remove fraudulent ads, fraudsters have consistently evaded these systems by frequently changing their ads.

The bipartisan coalition are calling on Meta to thoroughly review its advertising review practices to protect consumers from being wrongly shown these scam advertisements. The coalition letter urges Meta to implement more robust preventative measures, such as enhanced advertiser diligence and meaningful human review of investment-related advertisements before they run. If Meta cannot effectively curb these harmful scams, the attorneys general urge Meta to cease running investment advertisements altogether.               

Joining AG Ford in issuing today's letter are the attorneys general of Alaska, American Samoa, Arizona, Arkansas, California, Colorado, Connecticut, Delaware,  the District of Columbia, Georgia, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota, Utah, Vermont, Virginia, the Virgin Islands, Washington, West Virginia and Wyoming.

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