Meta Ran Scam Ads That Wiped Out $500 Million in Investor Savings
A federal lawsuit alleges Meta’s AI advertising tools actively built, optimized, and targeted investment fraud ads, letting a Chinese criminal network pump-and-dump a NASDAQ stock and destroy thousands of ordinary people’s financial lives.
Meta knew for years that scammers were using Facebook and Instagram to run investment fraud. Instead of stopping it, Meta’s AI tools helped build those scam ads, targeted them at vulnerable users, and collected revenue from the fraud. In early 2025, a Chinese criminal network used these Meta-built ads to lure thousands of investors into buying shares of a NASDAQ stock called JYD, then dumped 45 million shares at the peak, crashing the price by over 95% and stealing an estimated $500 million. A retired man lost his entire retirement fund on the first day he stopped working. A divorced mother lost her savings trying to rebuild her life. A tech professional and his wife lost over $850,000.
Meta did not make a mistake. It made a choice, and ordinary people paid for it. Demand accountability.
The Allegations: A Breakdown
| 01 | Meta’s AI advertising tools created, optimized, and distributed hundreds of fraudulent investment ads that lured thousands of victims into a stock manipulation scheme run by a Chinese criminal network. | high |
| 02 | The scam ads impersonated real celebrities and financial advisors including Kevin O’Leary, Jim Cramer, Bill Ackman, Ray Dalio, and Dave Ramsey. Meta knew the advertisers had no affiliation with these people and ran the ads anyway. | high |
| 03 | Meta’s Advantage+ AI tool auto-generated new scam ad variations, including creating AI images of people at different ethnicities to maximize how persuasive the fraud was to each individual target. | high |
| 04 | Victims who clicked the ads were funneled into WhatsApp groups where scammers impersonated financial advisors and pressured them to buy shares of Jayud Global Logistics (JYD), a NASDAQ-listed Chinese stock. | high |
| 05 | The scammers had pre-acquired 50 million JYD shares at deeply discounted prices. Victims’ purchases drove the stock price up over 100% in two weeks, after which the scammers dumped all 45 million shares overnight, collapsing the stock by 95%. | high |
| 06 | Meta had received specific prior warnings about nearly identical pump-and-dump schemes, including a February 2024 certified letter from nine victims detailing 21 scam ads. Meta ignored all of them. | high |
| 01 | Meta earns revenue from scam ads the same way it earns revenue from legitimate ads. Because banning scammers reduces revenue, Meta had a direct financial incentive to allow fraud to continue. | high |
| 02 | An internal Meta document from late 2024 revealed that the company charges scam advertisers higher ad rates rather than banning them, effectively selling a fraud premium to criminals. | high |
| 03 | China-based advertisers accounted for $18.35 billion in Meta revenue in 2024, up from $7.4 billion in 2022. Internal reports showed nearly 30% of Chinese ads violated Meta’s own policies, yet Meta aggressively grew the relationship. | high |
| 04 | Meta CEO Mark Zuckerberg personally reviewed and disbanded Meta’s China-focused anti-scam team in late 2024, ordering the freeze on Chinese ad agencies lifted. Scam ads from China surged immediately afterward. | high |
| 05 | A 2022 internal analysis found that 70% of newly active advertisers on Meta platforms were promoting scams, illicit goods, or low-quality products. Meta did not shut down the program. | high |
| 01 | Meta requires identity verification for political advertisers but has no equivalent process for investment advertisers, despite knowing that investment scams are rampant on its platforms. | high |
| 02 | When Taiwan mandated verification for all advertisers, investment scam rates dropped 96% and identity impersonation dropped 94%. Meta refused to implement similar measures globally. | high |
| 03 | A coalition of more than 40 State Attorneys General, including California’s Rob Bonta, warned Meta in 2025 that the ease of running investment scams on its platforms was “alarming” and called on Meta to stop running investment ads entirely if it could not police them. | med |
| 04 | Meta manipulated its public Ad Library to hide scam ads from regulators, deleting ads featuring celebrities and keywords that Japanese regulators were tracking, then added this tactic to its “general global playbook.” | high |
| 05 | FINRA, the FTC, Barclays, and the Australian Competition and Consumer Commission all issued public warnings about Meta-platform investment scams between 2018 and 2025. Meta did not implement substantive changes in response to any of them. | med |
| 01 | Meta’s automated fraud detection requires 95% certainty before banning an advertiser. This threshold is so high that the vast majority of fraudulent actors continue operating with impunity. | high |
| 02 | Small scam advertisers can accumulate at least 8 “strikes” for financial fraud before being removed. High-revenue advertisers can accumulate more than 500 strikes before any action is taken. | high |
| 03 | Meta promised users in its Terms of Service that it “does not allow” investment scam ads and will “take appropriate action” when notified of violations. The JYD lawsuit alleges Meta violated these contractual promises directly. | high |
| 04 | Meta continued running JYD scam ads even after victims reported them multiple times following the stock collapse, and continued running similar scams for more than a dozen other Chinese penny stocks throughout 2025. | high |
| 05 | Internal Meta sources told journalists employees were directed to ignore violations from Chinese-affiliated advertisers, with the internal guidance described as: “look the other way. It’s ‘Oh, that’s just China being China.'” | high |
Anthony Irving, a UK resident who had just retired after a 50-year career, was targeted by a Facebook ad and lost more than $339,000, including money he had saved for his grandchildren. The stock collapsed on the first day of his retirement.
Santosh Kumar, a California tech professional, and his wife lost more than $850,000 after being targeted through Instagram. Yaakov Strauss, a California real estate professional, lost more than $300,000 after being targeted through Facebook.
One victim was a newly divorced mother of three, reentering the workforce after 20 years, who lost her savings and now suffers from panic attacks and insomnia. Another was a 70-year-old military veteran and sole caretaker for his wife with dementia, who lost 40 years of savings. Some victims report thoughts of self-harm. This is what Meta’s business model produced.
Timeline of Events
Direct Quotes from the Legal Record
“We’re not told in the exact words, but [the idea is to] look the other way. It’s ‘Oh, that’s just China being China. It is what it is. We want China revenue.'”
An internal Meta source, quoted in investigative reporting, describes the explicit internal culture of ignoring fraud from Chinese advertisers to protect revenue. This is not negligence. This is deliberate policy.
“[B]y exploiting the trust placed in [its] platform, [the scammers] can reach a wide audience and lure unsuspecting individuals into fraudulent investment schemes, resulting in devastating consequences for those who are duped.”
From the February 2024 certified letter nine victims sent to Meta, more than a year before the JYD scheme. Meta had this warning in writing. It changed nothing.
Internal Meta documents from December 2024 acknowledge that “the company shows its platforms’ users an estimated 15 billion ‘higher risk’ scam advertisements, those that show clear signs of being fraudulent, every day.”
Meta’s own internal documents confirm the scale of the fraud problem. This is not an edge case. This is the default operating condition of Meta’s advertising business.
“Meta’s tools directed the ads to particular Facebook and Instagram users based on data (only known to Meta) indicating the users would be vulnerable to the ads, including by targeting users who demonstrated an interest in investing.”
From the complaint itself. Meta did not passively host these scams. It used its proprietary data to find the most susceptible victims and deliver the fraud directly to them.
Internal company documents reveal that Meta took steps to make problematic content “not findable” by “regulators, investors and journalists” in response to scrutiny from Japanese regulators.
Meta did not just fail to stop scams. It actively worked to prevent regulators from seeing how widespread the problem was. Then it turned this into a global policy.
“The ease with which these scams can be initiated and disseminated on [Meta’s] platforms, targeting our most vulnerable population, is alarming . . . If Meta is unable to implement a more effective process, then it should just stop running investment advertisements as a category.”
Over 40 state Attorneys General told Meta plainly: fix this or stop doing it. Meta did neither.
“Scammers often use public figures and celebrities’ images to bait people into engaging with scam content, including ads. This type of scam can harm both those who are victimized by the unauthorized use of their likeness, as well as members of the public who are deceived by scam ‘endorsements.'”
Meta published this statement in September 2024, acknowledging the exact harm it was enabling. Months later, the JYD scheme ran on its platforms using exactly this tactic.
One ad highlighted a stock that was expected to increase from $6 per share to $18 in 30 days, a one-month return of 200%, with a 60-day price target of $33, a 450% return in just two months.
These ads promised returns that are mathematically impossible in any legitimate investment. Meta’s policy explicitly bans “get-rich-quick” investment ads. Meta built these ads anyway.
💡 Explore Corporate Misconduct by Category
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- 💀 Product Safety Violations — When companies risk lives for profit.
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- 🛡️ Data Breaches & Privacy Abuses — Misuse and mishandling of personal information.
- 💵 Financial Fraud & Corruption — Lies, scams, and executive impunity.
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