Israel threatens Meta with new law after Facebook fails to curb AI-driven financial fraud
The Securities Authority demands a verification system for all investment-related advertisers.
The Israel Securities Authority (ISA) is threatening Meta with promoting new legislation in the Knesset that would require the company to take stronger action against fraud on its platforms, particularly on Facebook.
At the end of October, the ISA sent a letter to Adi Soffer-Teeni, General Manager of Meta Israel, warning that it would not tolerate delays in tackling online investment fraud. The letter stated that “if we do not see real progress in the immediate term, we will be forced to examine other alternatives, including legislative tools, that would establish the responsibility and obligation of social networks to protect their users from investor fraud.”
In July 2025, ISA representatives met with Meta officials to discuss possible ways to combat the growing wave of scams. It was agreed that a joint working group would be formed to examine, within weeks, effective measures Meta could adopt to prevent such fraud.
However, according to the Authority, little progress has been made since. The ISA argues that Meta’s inaction not only harms investors who fall victim to scams but also erodes public trust in Israel’s capital markets and the wider financial system.
On Wednesday, ISA Chairman Seffy Zinger appeared before the Knesset Subcommittee on Artificial Intelligence and Advanced Technologies, chaired by MK Orit Farkash-Hacohen. The session focused on the growing threat of financial fraud on social networks, often amplified by artificial intelligence. Zinger revealed that the total volume of fraud handled by the Authority had already reached “billions of shekels,” but noted that enforcement is severely limited, as most of the scams originate abroad.
“The world of artificial intelligence is amplifying this phenomenon,” Zinger told the committee. “A person sitting in another country, who doesn’t know anyone here, can easily create a video in Hebrew, one that names the CEO of the Tel Aviv Stock Exchange, the Governor of the Bank of Israel, or the Chairman of Bank Leumi, and publish it to a precisely targeted Israeli audience within minutes. Their ability to operate at scale is exponentially greater than in the past.”
Zinger added: “We realized that we need to address the infrastructure, and the main player here is Meta. It’s difficult to reach them or secure cooperation. Perhaps there are economic interests involved. We sought a proportional solution that could significantly reduce the problem while remaining compatible with how these platforms operate. The model we developed is based on verification and identification: anyone seeking to publish paid investment content targeting Israeli users would first need to undergo identity verification by Meta.”
The Authority’s proposed model would require advertisers promoting investment opportunities to obtain a permit and identification number from the relevant securities regulator before placing sponsored content. The social network would then be required to verify that the advertiser’s identity matches the registered permit holder.
According to Zinger, countries that have adopted similar measures, including Brazil, France, Germany, India, Indonesia, Thailand, Portugal, and New Zealand, have seen an almost complete disappearance of sponsored content from unauthorized or anonymous sources.
