3D-printed images of the logos of Facebook and parent company Meta Platforms are seen on a laptop keyboard in this illustration taken on November 2, 2021.

A US judge ruled against Meta Platforms' bid to dismiss a lawsuit filed by Australian mining magnate Andrew Forrest over scam Facebook advertisements that showed him promoting fraudulent cryptocurrency investments.

Forrest, the executive chairman of Fortescue Metals Group, filed the lawsuit against Meta, after the social media platform showed him promoting fake cryptocurrency and other fraudulent investments, Reuters reported.

The US court has now permitted Australia's second-richest person to prove Facebook's negligence in promoting ads that breached its duty to operate in a commercially reasonable manner, and that Meta misappropriated Forrest's name and likeness.

"Dr. Forrest claims that Meta profited more from ads that included his likeness than it would have if the ads had not," U.S. District Judge Casey Pitts stated. "This is enough to adequately plead that the alleged misappropriation was to Meta's advantage."

In April, Australian prosecutors had refused to pursue criminal charges against Meta after Forrest filed the lawsuit under Australian laws.

The fake crypto ads appeared many times on Facebook between April and November 2023 mainly targeting Australian consumers. Forrest alleged that the fake ads featuring him led to huge financial losses for victims, Coingape reported.

He pointed out that Meta gained more from the scam ads, thus breaching its duty to operate in a commercially reasonable manner.

The case is relevant as it is the first time a US court has refused a social media company to use Section 230 of the Communications Decency Act as defense. The section protects social media platforms from liability for third-party content.

The ruling could set a precedent leading to stricter scrutiny of social media giants in ad regulation.