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The Ohio Attorney General sues Meta in connection with the 'Facebook Papers' revelations

Following the revelations made by whistleblower Frances Haugen and the trove of internal business data she exposed, Ohio Attorney General Dave Yost announced Monday that he is suing Meta, the social networking giant that was formerly known as Facebook, in response to the lawsuit.

Specifically, the Ohio Public Employees Retirement System and other investors claim that the company misled the public about its algorithm and the harms that its own research indicated its apps could cause to users in a securities complaint filed on their behalf. It claims that executives at the now-defunct Facebook subsidiary Meta committed securities law violations by making false and misleading statements about the "safety, security, and privacy of its platforms" in order to drive up the company's stock price. Since reports on Haugen's claims and internal documents emerged two months ago, Meta (FB) shares have plummeted nearly 7 percent, causing investors to allegedly lose more than $100 billion.

Specifically, the lawsuit claims that "[Meta] misrepresented to investors and the general public on numerous occasions that using Facebook's products does not harm children, that the Company takes aggressive and effective measures to prevent the spread of harmful content, and that Facebook applies its standards of conduct equally to all users."

When Frances Haugen, a former Facebook employee who turned whistleblower, disclosed internal documents indicating that Defendants were aware that their platforms facilitate dissention, illegal activity and violent extremism and cause significant harm to users," the complaint states that "Facebook investors recently discovered the truth." A number of individuals, including Facebook CEO Mark Zuckerberg, Chief Financial Officer David Wehner, and Vice President of Global Affairs Nick Clegg, are named as defendants in the lawsuit.

In a statement to CNN Business on Monday, Meta spokesperson Andy Stone stated that the lawsuit had no merit. "We will vigorously defend ourselves."

According to internal Facebook documents, the Wall Street Journal launched a series called the "Facebook Files" in September that revealed concerns about Instagram's effect on underage girls, among other issues. The reporting prompted a meeting with Antigone Davis, Facebook's head of global security, at the request of a Senate subcommittee. As a result, Haugen testified before a Senate subcommittee, in which she stated that she believes Facebook's products "damage children, incite divisiveness, and undermine our democracy."

The internal Facebook documents, dubbed the "Facebook Papers," were provided to the Securities and Exchange Commission and politicians by Haugen. A group of news organizations, including CNN, evaluated the redacted versions of the documents that were delivered to Congress. A number of Meta's most serious issues are addressed in detail in the documents, which include the platform's approach to combating hate speech and misinformation, managing international development, and protecting the platform's younger users.

Another former Facebook employee anonymously filed a complaint with the Securities and Exchange Commission (SEC) last month, making allegations that were identical to Haugen's.

The Ohio lawsuit, which was filed on Friday, claims that "these disclosures resulted in the loss of more than $100 billion in shareholder value and the destruction of Facebook's reputation."

In response to Haugen's assertions, Meta (FB) has consistently asserted that the documents exaggerate the company's research and development efforts and activities.

"A false premise lies at the heart of these stories," a Facebook representative told CNN last month in response to the Facebook Papers. As a business, profit is necessary, but the notion that we do so at the expense of people's safety or well-being is a misinterpretation of our commercial objectives."

Announcing a rebranding as Meta as a result of the publication of the Facebook Papers, the company expressed optimism about its lofty ambitions to build an immersive internet platform known as the metaverse. Additionally, it altered its ad targeting procedures as well as the way it employs facial recognition software to better serve its customers.

Members of Congress, on the other hand, have called on Zuckerberg to testify regarding the findings of the documents.

"Not only does this action seek to recover the lost value, but it also requires Facebook to implement significant reforms in order to ensure that it does not mislead the public about its internal processes," according to Yost's office on Monday.

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