COLUMBUS, Ohio — Ohio’s largest public pension system is suing the parent company of Facebook, saying the social-media giant misled investors and other members of the public about the risks its products posed to children.
The lawsuit from Ohio Attorney General Dave Yost cites a September series of articles from the Wall Street Journal that, among other things, reported the company’s researchers knew its Instagram product was psychologically harmful to teenage girls.
“Despite this knowledge, Facebook opted to maximize its profits at the expense of the safety of its users and the broader public, exposing Facebook to serious reputational, legal, and financial harm,” the suit says.
The suit, filed in federal court in California, says the Ohio Public Employees Retirement System bought $47.6 million worth of Facebook stock in July, a few months before the articles came out. In October, after the articles came out, the pension fund sold some of those shares, worth $4.3 million, at a loss.
Facebook’s stock traded Monday at $346 a share, down about 1% from the price Ohio paid in July. The company recently announced it is changing its corporate name to Meta Platforms, Inc.
The lawsuit seeks class-action status, which would it allow other shareholders to become eligible for any damages the court may eventually award. The lawsuit says Facebook’s actions erased $100 billion in shareholder value.
Asked about the a lawsuit Monday, a Meta spokesperson said: “This suit is without merit and we will defend ourselves vigorously.”
OPERS has more than 1 million members and manages assets worth nearly $94 billion, according to the pension system’s 2020 annual report. At the end of 2020, Facebook was OPERS’ sixth-largest stock position, holding nearly 1.5 million shares worth $401 million.
OPERS is not the first state public-pension fund to sue Facebook. In July, the Employees’ Retirement System of Rhode Island filed a class-action lawsuit against Facebook over the company’s decision to pay a $5 billion fine to the Federal Trade Commission for violating its user’s privacy and over its handling of the Cambridge Analytical scandal.