Billionaire hedge fund manager Bill Ackman is taking a vocal stance against Visa, saying the credit card giant has the power to pressure Pornhub to remove child pornography from its site.
“My interest comes from the fact that I have four daughters,” Ackman said Tuesday on CNBC’s “Squawk Box.” “When you think about the worst harm — economic, physical, mental harm you can impact upon a human being — it’s having a child trafficked … video of the rape appear. I find it hard to talk about it.”
A federal judge in California on Friday denied Visa’s motion to dismiss a lawsuit by a woman who accuses the payment processor of knowingly facilitating the distribution of child pornography on Pornhub and other sites operated by parent company MindGeek.
The woman is suing Visa and MindGeek over a sexually explicit video her boyfriend filmed of her when she was 13. U.S. District Judge Cormac Carney in California denied parts of Visa’s motion to be dismissed from her claims.
“It is simple,” Carney said in his ruling. “Visa made the decision to continue to recognize MindGeek as a merchant, despite its alleged knowledge that MindGeek monetized child porn. MindGeek made the decision to continue monetizing child porn, and there are enough facts pled to suggest that the latter decision depended on the former.”
The Pershing Square CEO had called on Visa and Mastercard in late 2020 to temporarily withhold payments to Pornhub after a New York Times column by Nicholas Kristof brought the issue to light.
“Remarkably, the company, despite being entirely aware that there’s child pornography on these sites, they continue to provide payment services, until the Kristoff article, and then they shut down the sites overnight which would have bankrupted them,” Ackman said Tuesday. “Within a matter of weeks they re-authorized the merchants and started accepting payments again and the crime continues.”
Ackman said he has no economic stake in Visa, Mastercard or any payments company. He said he offered to help finance lawsuits philanthropically against Visa.
The hedge fund manager said he believes that this is one of the most egregious corporate governance failures he has witnessed and the company and its board could be faced with huge liabilities.
“It’s an extreme measure when Visa or Mastercard shuts down a merchant, but a merchant’s business is fundamentally illegal,” Ackman said. “There’s traditional breach of fiduciary duty when a company has a product or service that can cause harm.”
A Visa spokesperson told CNBC that the payments giant condemns sex trafficking, sexual exploitation, and child sexual abuse materials.
“This pre-trial ruling is disappointing and mischaracterizes Visa’s role and its policies and practices. Visa will not tolerate the use of our network for illegal activity,” the spokesperson said. “We continue to believe that Visa is an improper defendant in this case.”
Source: Finance - cnbc.com
