Bill Ackman, CEO of Pershing Square, unloaded on Visa Saturday after a federal judge in the Central District of California reportedly handed down a verdict in a lawsuit against MindGeek — the largest internet porn company in the world — along with the credit card company.
“Visa’s conduct here is inexcusable, likely to cause the company incalculable financial and reputational damage and create serious Caremark personal liability and potential criminal liability for the board,” Ackman began.
“The decision summarizes the life destruction of a 13-year-old girl due to a sex video she was pressured to make by her then boyfriend, which in turn was uploaded to one of MindGeek’s sites,” he continued.
Ackman, who is known for his activism on Wall Street, said when he first learned about the exploitation taking place, he called the CEO of Mastercard which led to the company — and later Visa — shutting down the site. This later led to MindGeek removing over 10 million illegal videos, roughly 80 percent of its content, according to the Pershing Square CEO.
“Quietly, however, a few weeks later, both Visa and MC reauthorized MindGeek, but no longer allowed BTC payments on the free ‘tube’ sites where anyone can upload content,” Ackman explained, adding, “Instead, they continued to allow their cards to be used for B2B business, that is, the purchase of ads on these same tube sites and for subscriptions to ‘premium’ content, together about 90% of the business. Hours later, MindGeek began restoring its illegal content library.”
In the suit — filed by Serena Fleites who had videos of her uploaded to PornHub.com in 2014 when she was underage — Visa argued the company, “claims it has no liability, protested that the payments industry would collapse if it did, and attempted to dismiss the suit taking comfort in its statement ‘Maintaining a neutral stance under the law is vital for the free flow of commerce,'” according to Ackman.
Yesterday, a Federal judge rendered a decision https://t.co/z7ImYJgWHi that no one has likely read. You should. The lawsuit is against MindGeek, the largest internet porn company in the world, and @Visa. Both are culpable. Visa’s conduct here is inexcusable,
— Bill Ackman (@BillAckman) July 30, 2022
Despite this defense, the judge explained the credit card company will be, “kept in this case because it is alleged to have continued to recognize as a merchant an immense, well-known, and highly visible business that it knew used its websites to host and monetize child porn.”
“Moreover, Visa allegedly had considerable sway over that business’s decision-making, a conclusion amply supported by the allegation that MindGeek removed 80% of its content when Visa suspended its business with MindGeek,” the judge continued.
“Visa is not being asked to police ‘the billions of individual transactions it processes each year.’ It is simply being asked to refrain from offering the tool with which a known alleged criminal entity performs its crimes. That is not a tall order and does not spell out an existential threat to the financial industry,” the Central District California Court explained.
The judge then outlined how Visa continued to maintain its relationship with MindGeek and allegedly allowed their payment services to remain in place, despite having knowledge of child exploitation on the site.
“The Court can comfortably infer that Visa intended to help MindGeek monetize child porn from the very fact that Visa continued to provide MindGeek the means to do so and knew MindGeek was indeed doing so. Put yet another way, Visa is not alleged to have simply created an incentive to commit a crime, it is alleged to have knowingly provided the tool used to complete the crime,” the judge concluded.
“In short, directors can be held personally liable if the company’s product or service causes harm and the board has provided inadequate oversight to monitor the potential for harm. The harm here is enormous,” Ackman emphasized, adding, “Think 10m++ videos of child porn and the destruction to the untold number of lives this has caused.”
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