Today, Nevada Attorney General Aaron D. Ford joined a coalition of 42 attorneys general urging Meta Platforms, Inc. to protect users from fraudulent investment ads on Facebook. The coalition's letter to Meta emphasizes the risks posed by these ads and calls for improvements in ad review processes.
"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."
Fraudulent Facebook ads often use images of well-known individuals such as Warren Buffet, Cathie Wood, and Elon Musk to attract users. These ads claim high returns on investments or offer free consultations but lead users into pump-and-dump schemes via WhatsApp groups.
In these schemes, scammers recommend buying certain stocks, causing prices to rise. They then sell the securities at inflated prices before values drop, leaving new stock owners with losses. Pump-and-dump schemes are illegal and considered securities fraud.
Meta's current automated systems and human reviews have not effectively stopped fraudsters who change their ads frequently. The coalition urges Meta to enhance its ad review practices with stronger preventative measures or cease running investment advertisements if effective controls cannot be implemented.
Attorneys general from states including Alaska, California, New York, Ohio, Texas, and others joined AG Ford in this initiative.