Meta Set to Face Fraudulent Pennystock Scam Advertisement Claims

Meta Platforms Inc. failed to convince a federal judge to toss a proposed class action from investors alleging it helped create and promote fraudulent advertisements for a pump-and-dump penny stock scheme.

Investors in the scheme sufficiently alleged the scammers used generative AI tools offered by Meta, defeating the company’s Section 230 immunity argument, the US District Court for the Northern District of California said Tuesday.

The investors said they clicked on advertisements in which well-known business personalities like Kevin O’Leary from Shark Tank and Savita Subramanian, Bank of America’s head of US equity and quantitative strategy, promoted a private investment ...