Attorney General James Leads Bipartisan Coalition Urging Meta to Protect Users from Fraudulent Investment Ads

NEW YORK – New York Attorney General Letitia James today led a bipartisan coalition of 42 attorneys general in calling on Meta Platforms, Inc. (Meta) to protect people from fraudulent investment ads appearing on Facebook. The Office of the Attorney General (OAG) has found several Facebook ads impersonating prominent figures, such as Warren Buffett, claiming to offer high returns on investments. The fraudulent ads are luring vulnerable users into pump-and-dump schemes that have led to thousands of people losing hundreds of millions of dollars. The OAG received a report of an individual who engaged with a fraudulent Facebook ad, which claimed to be connected to a well-known investment management firm, and lost over $100,000. In their letter to Meta, Attorney General James and the coalition highlight the dangers of these ads and urge Meta to improve its process for reviewing ads before they appear on its platforms.

“Scammers are using Facebook ads to trick New Yorkers and others across the country into investing in fraudulent schemes,” said Attorney General James. “Thousands of Facebook users have lost hundreds of millions of dollars to these scams and Meta must do more to stop these fraudulent ads from running on its platforms. Today, I am leading a bipartisan coalition calling on Meta to step up its review of ads to stop these scams. I also urge all New Yorkers to be extra careful before putting their money in investments they see advertised on social media.”

The fraudulent Facebook ads use images of well-known individuals, such as Warren Buffett, Elon Musk, and Andrew Sorkin, who are not affiliated with the groups who run the ads, to draw users into the investment scheme. 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. An OAG investigator joined the fake investment tip WhatsApp group, and later received a phone call from one of the scammers who used artificial intelligence to speak English. The caller was not a native English speaker and appeared to use artificial intelligence to change her voice to sound like she had a British accent. Despite the British accent, the caller said she was based in Arkansas. When asked to identify the capital of Arkansas, she was unable to do so.

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. Months after submitting scam reports to Meta, OAG continued to receive scam ads.

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

This matter is being handled by Deputy Bureau Chief Clark Russell and Senior Enforcement Counsel Jordan Adler of the Bureau of Internet and Technology. The Bureau of Internet and Technology is led by Bureau Chief Kim Berger. The Bureau of Internet and Technology is part of the Division of Economic Justice, which is led by Chief Deputy Attorney General Chris D’Angelo and overseen by First Deputy Attorney General Jennifer Levy.