Denmark’s largest commercial pension fund has been appointed by a California court to co-lead a lawsuit against Facebook parent company Meta, alleging the company misled the financial markets.
PFA, which manages DKK725bn (€97.4bn) of assets, announced today it has been appointed, together with the US state of Ohio, to lead a lawsuit against Facebook/Meta in California “with a view to seeking compensation for price losses caused by the company’s misleading information to the market”.
Rasmus Bessing, chief operating officer of PFA Asset Management, said: “At PFA, we have a responsibility to invest our customers’ pension savings responsibly.”
As investors, he said, PFA had to be able to trust that the listed companies in which it invested clients’ money provided timely, complete and accurate information to it and the rest of the market.
“Additionally, we believe that Facebook/Meta Inc., as one of the world’s largest content providers and social media, has a responsibility to uphold its publicly stated obligations to apply its standards of conduct equally to all users and to take appropriate steps to prevent proliferation of misinformation or harmful content,” Bessing said.
PFA said the case was based on the fact that Facebook/Meta had misled investors on a number of issues during the period from 29 April 2021 to 21 October 2021.
The case alleges the social media giant misled investors on how an algorithm change intended to increase user engagement led to misinformation and harmful content of various types becoming disproportionately widespread, according to PFA.
The Danish pension fund said that on top of this, despite public assurances from Meta that it applied standards of conduct equally to all users, the company had built a system that exempted millions of high-profile users.
“This appears from an internal investigation at Facebook from 2019,” PFA said, adding that the information about the company’s unwillingness to protect its users had became public knowledge through investigations by journalists at The Wall Street Journal and a whistleblower from the company.
It went on to say that Facebook/Meta’s misinformation to the market had led to a significant drop in its share price and damage to its investors.
“The Federal District Court in the Northern District of California, which oversees the investor case against the company, has subsequently chosen PFA Pension and the State of Ohio (Ohio Public Employees Retirement System) to lead the case in order to seek compensation for the losses suffered by the affected investors (class action),” PFA said.
The Copenhagen-based pension fund said it also had a sustainable development interest in conducting the case to make sure the Californian company from now on acted in a way that ensured a healthy life for everyone and promoted well-being for all age groups – citing UN Global Goal number three regarding health and well-being.
IPE has emailed Meta requesting comment on the matter.