Business
‘Victims of Instagram’: Meta faces novel legal threat over teen suicides
Meta is facing a fresh storm of lawsuits that blame Instagram for eating disorders, depression and even suicides among children and teens — and experts say the suits are using a novel argument that could pose a threat to Mark Zuckerberg’s social-media empire.
The suits — which are full of disturbing stories of teens being barraged by Instagram posts promoting anorexia, self-harm and suicide — rely heavily on leaks by whistleblower Frances Haugen, who last year exposed internal Meta documents showing that Instagram makes body image issues and other mental health problems worse for many teens.
The leaks provide proof that Meta was well aware its products were hurting children but chose to put growth and profits over safety, the suits claim. Some of the suits also name Snapchat and TikTok, which the plaintiffs argue have also pushed addictive products despite knowing the deadly downsides.
“In what universe can a company have a product that directs this kind of vile filth, this dangerous content to kids — and get away with it?” said Matthew Bergman, the founder of the Social Media Victims Law Center, which has filed more than a half-dozen of the lawsuits. “These products are causing grievous harm to our kids.”
Section 230
Bergman faces an uphill battle due to Section 230 of the Communications Decency Act, a law that has largely protected social-media companies from similar litigation. But Bergman also has a novel legal strategy based on Haugen’s leaks that the families he represents hope will force Meta to change its ways.
Meta and other tech companies have fought off lawsuits for years using Section 230, which was intended to preserve internet users’ free speech by preventing web platforms from being held legally liable for content posted by third parties.
But Bergman argues that the problem with Instagram is not just that third parties post harmful content on the app — it’s that Instagram’s design can intentionally route vulnerable users toward such content, as detailed by Haugen’s leaks. Therefore, he argues, the company shouldn’t be protected by Section 230.
“It’s our belief that when you attack the platform as a product, that’s different than Section 230,” Bergman said. “230 has been a barrier and it’s something we take seriously and we believe we have a viable legal theory to get around it.”
Meta did not return a request for comment.
Self-harm, addiction and death
One suit centers around a Louisiana girl named Englyn Roberts, who committed suicide in 2020 at age 14.
According to the suit filed in July in San Francisco federal court, Roberts’ parents had no idea the extent to which she was quietly being “bombarded by Instagram, Snapchat and TikTok with harmful images and videos,” including “violent and disturbing content glorifying self-harm and suicide.”
The more Roberts allegedly interacted with such photos and videos, the more the apps recommended similar content that kept her hooked in a vicious cycle. Roberts started exchanging self-harm videos with her friends, including one disturbing video in September 2019 of a woman hanging herself with an extension cord from a door, according to screenshots included in court papers.
In August 2020, Roberts appeared to imitate the video when she used an extension cord to hang herself from the door. Her parents found her hours later and she was rushed to the hospital. She was put on life support and died days later.
About a year after Roberts’ death, her father saw a report about Frances Haugen’s leaks about Instagram’s harms. He subsequently searched his daughter’s old phones and social media accounts and uncovered her posts and messages about suicide.
“What became clear in September of 2021 is that Englyn’s death was the proximate result of psychic injury caused by her addictive use of Instagram, Snapchat, and TikTok,” the suit reads.
This maneuver around Section 230 means “Meta should be worried,” according to a recent analysis of one of Bergman’s suits by Gonzaga School of Law Professor Wayne Unger.
“The reasons for Section 230 immunity fall flat with respect to Spence’s lawsuit,” Unger wrote. “If the primary beneficiary of Section 230 protection is the internet user, then it follows that platforms should not be allowed to use Section 230 immunity for the harms the platforms directly cause their users.”
‘Knowingly releasing a toxin’
Bergman previously represented Asbestos victims before switching to social media lawsuits last year in the wake of Haugen’s testimony.
“To me that was basically everything I’ve seen in the asbestos industry times one hundred,” Bergman said of Haugen’s leaks. “Both [asbestos producers and Meta] were knowingly releasing a toxin.”
Other alleged victims of social media represented by Bergman’s firm include two other teens from Louisiana and another from Wisconsin who all committed suicide after being hooked on social media apps.
An additional disturbing suit filed by a Connecticut mother alleges that her daughter killed herself at just 11 years old after becoming addicted to social media apps and being barraged by sexually explicit videos from strangers. The pre-teen girl even made a video of herself taking the pills that killed her, the suit claims.
Other suits have been filed by victims who are still alive but who say they have suffered from severe anorexia, mental trauma and other harms harm due to their social media use.
Read the full article here
Business
Families can make a tax-free rollover from 529 plans to Roth individual retirement accounts starting in 2024
Maskot | Maskot | Getty Images
Americans who save for college in 529 plans will soon have a way to rescue unused funds while keeping their tax benefits intact.
A $1.7 trillion government funding package has a provision that lets savers roll money from 529 plans to Roth individual retirement accounts free of income tax or tax penalties.
related investing news
The House passed the measure Friday and the Senate did so Thursday. The bill heads to President Biden, who’s expected to sign it into law.
More from Personal Finance:
10 ways to avoid the early withdrawal penalty for IRAs
Retirement savers with lower incomes may be getting a federal ‘match’
‘Best’ ways to maximize your tax deduction for charitable gifts
The rollover measure — which takes effect in 2024 — has some limitations. Among the largest: There’s a $35,000 lifetime cap on transfers.
“It’s a good provision for people who have [529 accounts] and the money hasn’t been used,” said Ed Slott, a certified public accountant and IRA expert based in Rockville Centre, New York.
That might happen if a beneficiary — such as a child or grandchild — doesn’t attend a college, university, vocational or private K-12 school, or other qualifying institution, for example. Or, a student may receive scholarships that mean some 529 funds are left over.
Millions of 529 accounts hold billions in savings
There were nearly 15 million 529 accounts at the end of last year, holding a total $480 billion, according to the Investment Company Institute. That’s an average of about $30,600 per account.
529 plans carry tax advantages for college savers. Namely, investment earnings on account contributions grow tax-free and aren’t taxable if used for qualifying education expenses like tuition, fees, books, and room and board.
However, that investment growth is generally subject to income tax and a 10% tax penalty if used for an ineligible expense.
This is where rollovers to a Roth IRA can benefit savers with stranded 529 money. A transfer would skirt income tax and penalties; investments would keep growing tax-free in a Roth account, and future retirement withdrawals would also be tax-free.
Some think it’s a handout for the rich
However, some critics think the rollover policy largely amounts to a tax handout to wealthier families.
“You’re giving savings incentives to those who can save and leaving behind those who cannot save,” said Steve Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center.
A 2012 analysis conducted by the Government Accountability Office found the typical American with a 529 account had “much more wealth” than someone without: $413,500 in total wealth for the median person, about 25 times the amount of a non-accountholder.
You’re giving savings incentives to those who can save and leaving behind those who cannot save.
Steve Rosenthal
senior fellow at the Urban-Brookings Tax Policy Center
Further, the typical owner had a roughly $142,000 annual income versus $45,000 for other families, the GAO report said. Almost half, 47%, had incomes over $150,000.
The new 529-to-Roth IRA transfer provision doesn’t carry income limits.
Limitations on 529-to-IRA transfers
While the new tax break primarily benefits wealthier families, there are “pretty significant” limitations on the rollovers that reduce the financial benefit, Jeffrey Levine, a certified financial planner and certified public accountant based in St. Louis, said in a tweet.
The restrictions include:
- A $35,000 lifetime cap on transfers.
- Rollovers are subject to the annual Roth IRA contribution limit. (The limit is $6,500 in 2023.)
- The rollover can only be made to the beneficiary’s Roth IRA — not that of the account owner. (In other words, a 529 owned by a parent with the child as beneficiary would need to be rolled into the child’s IRA, not the parent’s.)
- The 529 account must have been open for at least 15 years. (It seems changing account beneficiaries may restart that 15-year clock, Levine said.)
- Accountholders can’t roll over contributions, or earnings on those contributions, made in the last five years.
In a summary document, the Senate Finance Committee said current 529 tax rules have “led to hesitating, delaying, or declining to fund 529s to levels needed to pay for the rising costs of education.”
“Families who sacrifice and save in 529 accounts should not be punished with tax and penalty years later if the beneficiary has found an alternative way to pay for their education,” it said.
Are 529 plans already flexible enough?
Some education savings experts think 529 accounts have adequate flexibility so as not to deter families from using them.
For example, owners with leftover account funds can change beneficiaries to another qualifying family member — thereby helping avoid a tax penalty for non-qualified withdrawals. Aside from a kid or grandkid, that family member might be you; a spouse; a son, daughter, brother, sister, father or mother-in-law; sibling or step-sibling; first cousin or their spouse; a niece, nephew or their spouse; or aunt and uncle, among others.
Owners can also keep funds in an account for a beneficiary’s graduate schooling or the education of a future grandchild, according to Savingforcollege.com. Funds can also be used to make up to $10,000 of student loan payments.
The tax penalty may also not be quite as bad as some think, according to education expert Mark Kantrowitz. For example, taxes are assessed at the beneficiary’s income-tax rate, which is generally lower than the parent’s tax rate by at least 10 percentage points.
In that case, the parent “is no worse off than they would have been had they saved in a taxable account,” depending on their tax rates on long-term capital gains, he said.
Read the full article here
The knives are out for Goldman Sachs CEO David Solomon, and this time the people brandishing them aren’t the usual suspects — his junior staffers annoyed that they have to work late or come into the office several times a week.
Solomon’s problems are more serious and existential, I am told, and how he handles what can best be described as a revolt in some quarters of Goldman’s middle and upper management ranks could determine how much longer he stays in his job.
Solomon, 60, took the job in 2018 and was always somewhat of an odd choice to run the white-shoe investment bank that usually cultivated its leaders from within. He cut his teeth at a decidedly un-Goldman-like venue: the scrappy investment bank Bear Stearns (ultimately one of the causalities of the 2008 financial crisis).
He joined Goldman in 1999, as a partner, no less, because his deal-making chops allowed him to skip layers of management.
In other words, Solomon is an outsider at a firm with a wickedly insular culture. He has a quirky side gig as a DJ in the summer Hamptons party circuit. He’s also not one for small talk, and doesn’t consult with a lot of people before handing down his edicts.
“He doesn’t breed a lot of love,” said one former Goldman executive who knows Solomon well.
Lots of people at Goldman don’t like him, and they’re letting their views be heard both internally and with pals at rival firms.
For the record: I’ve met Solomon and like him for his no-BS style. And until pretty recently, the numbers show him doing a great job. Goldman was running on all cylinders in deals and trading. Even as the market corrects, shares are up about 60% since Solomon took over as CEO in 2018 compared to around a 44% rise in the S&P during that time.
Goldman is still the top M&A shop, even widening its market share over rivals in that important business line. Solomon was the first among his fellow CEOs to see the downturn and enact significant layoffs to cut costs.
Still, the grumbling about Solomon is spreading to the managing director and partner class. High-priced Wall Street talent don’t call all the shots at any firm, of course. But Goldman’s MDs and partners have historically been a powerful force when the board decides the fate of current management, which makes Solomon’s hold on his job increasingly precarious as more and more of them defect from his camp.
Here’s how they’re building a case against him: Goldman’s longtime archrival investment bank Morgan Stanley now easily dwarfs Goldman in market value, $144 billion to $116 billion, continuing a trend that predates Solomon. That comes amid a slowdown in banking deals, Goldman’s bread-and-butter business, and Solomon’s home turf.
Morgan’s CEO James Gorman deftly expanded the firm’s wealth management operations, which provide steady revenues. Solomon’s effort to diversify was an overindulgence in something called Marcus, a digital retail bank launched by his predecessor Lloyd Bankfein that Solomon made his baby. So far, it’s been a disaster, so much so that Solomon has been forced to scale back, possibly on the way to winding it down.
Goldman, meanwhile, has missed targets in its recent earnings announcements, and more downward surprises could be in store as markets continue to wobble. Bonuses are down, in some places cut in half, albeit from the nosebleed levels of 2021.
Traders did well in 2022 because Goldman’s are particularly adept in profiting off turbulence, but part of their pool is being diverted to bankers to keep them in-house until the deal slowdown ends.
Since Solomon is a banker, he’s also being accused of favoritism, which in truth is a pretty lame charge, since bankers often subsidize trader bonuses when the markets aren’t profitable. Still, the Goldman trading department is powerful and can spark management change, as it has done in the past.
There’s also a question about Solomon’s allegiance to Goldman’s stand-alone culture. In its 153-year existence, Goldman has operated on the assumption that it would be the acquirer in any major strategic acquisition. Solomon’s experience at Bear, then one of the most transactional places on Wall Street, means he could be looking for a deal and not one that keeps Goldman in charge.
At a time when most Goldman insiders believe he needs to do a “transformational deal,” i.e., something big that allows it to better compete against Morgan Stanley and super banks like JP Morgan, there is speculation that Solomon might allow Goldman to be swallowed whole by, say, a big asset manager or bank if the price was right.
As best I can tell, this grumbling, though real, doesn’t immediately threaten Solomon’s job. Then again, there is something to be said for keeping your producers happy.
Jack Welch, the legendary CEO of General Electric, was a notorious screamer and demanding beyond belief. Yet Welch knew how to nurture his people.
“Jack could chew your ass, then put his arm around you and make you feel great,” one of his longtime executives, Bob Nardelli, once told me.
It’s why so many other talented execs chose to stay around under Welch, abuse and all, and left when his successor took over, watching GE implode from the outside.
Maybe it’s a good time for Solomon to take a page from Welch and start hugging it out.
Read the full article here
The F.D.A. Now Says It Plainly: Morning-After Pills Are Not Abortion Pills
Sister Patricia Daly, 66, Dies; Took On Corporate Giants on Social Justice
ElonJet is (sort of) back on Twitter
This Off-the-Shoulder Sequin Top Is Perfect for New Year’s Eve — On Sale Now!
Families can make a tax-free rollover from 529 plans to Roth individual retirement accounts starting in 2024
The F.D.A. Now Says It Plainly: Morning-After Pills Are Not Abortion Pills
Sister Patricia Daly, 66, Dies; Took On Corporate Giants on Social Justice
House Clears $1.7 Trillion Spending Package, Averting Shutdown
She Worked for Twitter. Then She Tweeted at Elon Musk.
