Federal judge shields Meta from impersonation lawsuit tied to Chinese penny-stock scam

U.S. District Court Judge Richard Seeborg dismissed the impersonation claims brought by a class of financial professionals who said Meta’s platform was used to run a pump-and-dump operation involving Chinese penny stocks. The plaintiffs contended that Meta’s advertising and generative-AI services facilitated ads that led victims to WhatsApp groups where scammers used the professionals’ names, images, and voices. Seeborg concluded that the offending content was created entirely by the scammers in the messaging apps, and Section 230 shields Meta from liability for third-party content.

He also found Meta’s terms do not constitute a promise to remove fraudulent material, tossing the breach-of-contract claim, and dismissed the unfair-competition allegation. The plaintiffs have 21 days to revise their filing to specify any alleged impersonation in the ads themselves. Earlier related cases were similarly dismissed on jurisdictional or statutory grounds.