Carson City, NV — Nevada Attorney General Aaron D. Ford has joined a coalition of 42 attorneys general urging Meta Platforms, Inc. to take action against fraudulent investment ads on Facebook. The coalition sent a letter to Meta highlighting the risks posed by these ads and calling for improved 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.”
Scammers often use images of well-known individuals such as Warren Buffet, Cathie Wood, and Elon Musk in fraudulent ads to attract users. These ads promise high returns or offer free consultations but lead users into pump-and-dump schemes via WhatsApp groups.
In pump-and-dump schemes, scammers recommend buying certain stocks whose prices rise due to user purchases. The fraudsters then sell their shares at inflated prices before the stock value drops, leaving new owners with losses. Such schemes are illegal under securities law.
Meta’s current automated systems and human reviews have been insufficient in stopping these scams as fraudsters adapt by changing their ads frequently.
The coalition is asking Meta to enhance its ad review practices with better advertiser diligence and meaningful human oversight of investment-related advertisements. If improvements are not made, they suggest that Meta should consider stopping investment ads altogether.
Joining AG Ford are attorneys general from states including Alaska, California, New York, Texas, Washington among others.
