Meta Hit With Lawsuit Over Alleged Role In Massive Investment Scam

Case Overview: A class action lawsuit claims Meta knowingly enabled and profited from a large-scale investment scam, allowing fraudsters to use its advertising tools to target users with deceptive financial ads.

Consumers Affected: U.S. consumers who were lured into investing in China Liberal Education Holdings Ltd. (CLEU) between January 22, 2025, and January 30, 2025, because of fraudulent advertisements on Facebook and Instagram, and who suffered losses as a result.

Court: U.S. District Court for the Northern District of California

Meta is facing a proposed class action lawsuit that claims the social media giant enabled and profited from a large-scale investment scam that duped victims into losing hundreds of millions of dollars. 

The lawsuit says Meta knowingly allowed fraudsters to use its powerful advertising tools across Facebook, Instagram, and WhatsApp to target users with deceptive financial ads, ultimately leading to a stock manipulation scheme involving a little-known penny stock.

Victims Say Tech Giant's Ads Fueled Massive Losses

Filed by Joshua Bouck, Atul Shah, Shenwei Zhao, Adam Spring, and Giao Q. Tran, who live across the U.S., the lawsuit accuses Meta of failing to stop fraudulent ads that lured them into investing in China Liberal Education Holdings Ltd. (CLEU), a thinly traded stock. 

The scammers, part of a criminal network operating out of Asia, used fake investment club ads featuring familiar celebrity and financial expert faces to hook victims on Facebook and Instagram. Once users clicked, they were funneled into WhatsApp groups posing as financial advice communities.

Inside these groups, victims were encouraged to buy CLEU stock at specific prices. Behind the scenes, the scammers had secretly acquired 240 million newly issued shares of the stock and were offloading them at inflated prices, thanks to their coordinated manipulation. When news of the secret stock issuance broke, CLEU’s price plummeted, wiping out over $300 million in investor funds.

Deceptive Ads Allegedly Leveraged Advanced Targeting Tools

The lawsuit claims Meta’s advanced ad-targeting system wasn’t just a passive conduit—it was essential to the scam’s reach and effectiveness. Meta's tools allegedly optimized ad content and delivery to users most likely to be interested in investing, even customizing ads based on race, ethnicity, or known browsing behaviors. 

Victims say they were targeted shortly after researching financial topics, visiting investment sites, or even discussing money matters near their devices.

According to the complaint, Meta’s refusal to curb scam ads, despite repeated warnings from regulators, victims, and its own internal reports, amounted to active facilitation of the fraud. The plaintiffs are seeking damages, the return of ad profits Meta made through the scam, and a court order requiring the company to implement better ad monitoring systems.

Meta Faces Mounting Legal Challenges Over Ad Practices

This lawsuit joins a growing list of legal battles Meta is facing over its advertising practices. In a separate case, a fitness company alleges Meta secretly inflated ad prices by manipulating its auction system—netting the company billions in extra revenue. 

Meta has also settled past lawsuits over privacy violations and is currently under scrutiny for its use of user data to train AI. The plaintiffs in the current case say Meta’s inaction and prioritization of ad revenue over user safety helped scammers devastate their financial lives and they’re asking the court to hold the company accountable.

The five plaintiffs want to represent anyone in the US who was lured into investing in CLEU between January 22, 2025 and January 30, 2025 because of fraudulent advertisements on Facebook and Instagram and suffered losses as a result. 

They are suing for violations of California’s Unruh Civil Rights Act, aiding and abetting fraud, breach of contract, negligence, and unjust enrichment, and are seeking damages, injunctive relief, fees, costs, and interest.

Case Details

• Lawsuit: Bouck, et al. v. Meta Platforms, Inc.
• Case Number: 3:25-cv-05194 
• Court: U.S. District Court for the Northern District of California 

Plaintiffs' Attorneys

• Leonid Kandinov, Aaron T. Morris, Andrew W. Robertson, and William H. Spruance (Morris Kandinov LLP)

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