COLUMBUS, Ohio (WSYX) – Ohio's attorney general is suing Facebook alleging that revelations from document leaks and whistleblower testimony show that the company misled investors, including the state's pension fund.
Attorney General Dave Yost and the Ohio Public Employees Retirement System filed the lawsuit Friday in the U.S. District Court in the Northern District of California.
Yost alleges Facebook, now Meta, knowingly exploited children to drive profits and misrepresented to investors that its products do not harm children and about the steps Facebook takes to stop the spread of harmful content.
A Meta spokesperson said, "This suit is without merit and we will defend ourselves vigorously.”
Frances Haugen, 37, was a product manager hired in 2019 as part of Facebook's civic integrity team. In September, the Wall Street Journal published “Facebook Files” using internal research documents, online employee discussions and drafts of presentations to management gathered by Haugen.
She later provided more to a consortium of 17 news outlets and testified in front of Congress that the company’s business model entails knowingly subjecting children and other users to harm and misinformation to increase engagement and profits.
Yost claims those leaked documents show Facebook and its senior executives violated federal security laws by purposely misleading the public about the negative effects its products have on the health and well-being of children and the steps the company has taken to protect the public.
OPERS other Facebook investors, Yost said, OPERS and other investors lost more than $100 billion after the company's stock devalued by $54.08 per share.
The lawsuit, in part, seeks to recover that lost value. Yost also said he wants Facebook to make significant reforms.
OPERS said in the filing that it purchased 139,221 shares in four transactions between May 27, 2021, and Sept. 17, 2021. It also sold 52,695 in eight transactions between May 27, 2021, and Oct. 21, 2021.
The largest of those transactions was July 6 when OPERS bought 135,000 shares at $352.78. OPERS sold nearly 700 shares afterward at $379.38 prior to the whistleblower's information being published.
Following news stories on the leaks, OPERS sold 11,557 shares at $328.53 on Sept. 14 and 11,445 shares at $341.88 on Sept. 21.
The Ohio Attorney General said he will file a motion to have OPERS named the lead plaintiff on Dec. 27, 2021, and asked others to join the action.
Yost previously joined 43 other state attorneys general in urging Meta CEO Mark Zuckerberg to halt his plans to introduce an Instagram app for kids, which the company ultimately did.
Note: a previous version this story omitted 'and other investors' in the graph about how much Yost said Facebook's devaluation cost. The sentence was corrected to say, "OPERS and other investors lost more than $100 billion after the company's stock devalued by $54.08 per share."