By Jonathan Stempel
(Reuters) - A new lawsuit accuses Mark Zuckerberg and other Meta Platforms Inc (NASDAQ:META) executives and directors of failing to do enough to stop sex trafficking and child sexual exploitation on Facebook and Instagram.
The complaint made public late Monday by several pension and investment funds that own Meta stock said Meta's leadership and board have failed to protect the company's and shareholders' interests by turning a blind eye to "systemic evidence" of criminal activity.
Given the board's failure to explain how it tries to root out the problem, "the only logical inference is that the board has consciously decided to permit Meta's platforms to promote and facilitate sex/human trafficking," the complaint said.
Meta rejected the basis for the lawsuit, which was filed in Delaware Chancery Court.
"We prohibit human exploitation and child sexual exploitation in no uncertain terms," it said in a statement on Tuesday. "The claims in this lawsuit mischaracterize our efforts to combat this type of activity. Our goal is to prevent people who seek to exploit others from using our platform."
Zuckerberg, Meta's billionaire co-founder and chief executive, told Congress in 2019 that child exploitation was "one of the most serious threats that we focus on."
Meta, based in Menlo Park, California, has long faced accusations that its platforms are a haven for sexual misconduct.
In June 2021, the Texas Supreme Court allowed three people who became entangled with their abusers through Facebook to sue, saying Facebook was not a "lawless no-man's-land" immune from liability for human trafficking.
Meta separately faces hundreds of lawsuits from families of teenagers and younger children who claimed to suffer mental health problems by becoming addicted to Facebook and Instagram. Some school districts have also filed lawsuits over the problem.
Monday's lawsuit is a derivative case, where shareholders sue officers and directors who allegedly breached their duties.
Damages are paid to the company, often by the officers' and directors' insurers, instead of to shareholders.
The case is Employees' Retirement System of the State of Rhode Island et al v Zuckerberg et al, Delaware Chancery Court, No. 2023-0304.