From Tuesday's decision by Chief Judge Richard Seeborg (N.D. Cal.) in Bouck v. Meta Platforms, Inc.:
This case is the latest installment in an expanding genre: suits against social media companies for participating in the creation and promotion of fraudulent advertisements. Plaintiffs here are victims of a pump-and-dump scheme involving shares of a Chinese penny stock, China Liberal Education Holdings Ltd. ("CLEU"). The scammers targeted Plaintiffs on Facebook and Instagram (both Meta products) through advertisements for investment groups promising handsome returns. When a plaintiff clicked on the ad, he was led to a group on WhatsApp (another Meta product) wherein the scammers would persuade the plaintiff to purchase CLEU shares. Those shares ended up being nearly worthless.
Plaintiffs sued for, among other things, aiding and abetting fraud and negligence, and the court rejected Meta's attempt to get the case dismissed on § 230 grounds:
