Aug 7, 2026
Follow us on Google for more Moneywise news
Add us on GoogleEmergency rooms in New Mexico are so crowded with children in psychiatric crisis that some kids sleep in hallways, waiting for a bed to open.
That’s how Dr. Kimothi Cain, a child psychiatrist at the University of New Mexico, described it under oath: “They sleep in the hallways with no privacy until a psychiatric bed can open so we can keep these children safe.”
Advertisement
On Aug. 6, Judge Bryan Biedscheid ruled that Meta helped cause that crisis. His order requires the company to pay $567 million into an abatement fund, on top of the $375 million a jury awarded New Mexico in March, bringing the state’s total to $942 million — the first judgment of its kind against Meta to come out of a full trial. Meta’s latest earnings show the company earns that much profit in roughly five days.
Thanks for subscribing!
The money news that actually matters.
By signing up, you accept Moneywise Terms of Use, Subscription Agreement, and Privacy Policy.
How the $942 million breaks down
A jury that heard evidence from Feb. 2 through March 24 found Meta committed 75,000 violations of New Mexico’s Unfair Practices Act. At the maximum $5,000 per violation, that came to $375 million. Biedscheid then held a bench trial in May, ruled that Instagram and Facebook amount to a public nuisance under state law and ordered the $567 million fund. Of that, $420 million goes to mental health treatment for kids in the state.
Much of the evidence came from Meta’s own files. According to the court’s findings, a 2019 internal test found that “26% of the people we recommend to Groomers were Teens.” In a 2020 internal chat, an employee wrote that the People You May Know feature “was responsible for 80% of violating adult/minor connections.”
Arturo Bejar, who ran Meta’s Protect and Care engineering team for six years, told the jury: “the product is very good at connecting people with interests, and if your interest is little girls, it will be really good at connecting you with little girls.”
Must Read
- The ultra-rich use these 5 real estate strategies to build wealth while they sleep — you can start with just $100
- Here’s the average income of Americans by age in 2026. Are you keeping up or falling behind?
- Insurance companies profit most from drivers who auto-renew without shopping around. Comparing 100+ quotes takes 2 minutes and costs nothing
Join 250,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
Why the judgment barely dents Meta’s finances
Meta reported second-quarter earnings on July 29, eight days before the ruling. Revenue came in at $60.8 billion, and the quarter produced roughly $15.8 billion in net income — about $174 million in profit every day for 91 days. At that rate, the company covers the full New Mexico judgment in about 5.4 days. Put another way, the biggest child safety judgment Meta has ever faced at trial costs it less than 6% of one quarter’s profit.
Meta had already set money aside for outcomes like this. The company booked $2.4 billion in legal charges in the quarter, more than twice the New Mexico total, and told investors that several more youth-related trials scheduled this year could bring material losses. Also, the market read Thursday’s ruling accordingly, as Meta shares slipped less than half a percent in after-hours trading.
Biedscheid acknowledged the limits of what one state court could do to a company this size. He cut the state’s proposed 15-year abatement plan to five years and reduced the total because, in the court’s assessment, other platforms including Snapchat, TikTok and YouTube also contributed to the same harms.
What the order changes for teen accounts in New Mexico
If your teenager is on Instagram in New Mexico, the order changes a few concrete things.
Advertisement
Their account stays private by default, and switching that off now requires a parent’s consent. Meta can’t recommend their account to any adult they don’t know, and unconnected adults can’t message them at all. Adults caught in child sexual exploitation face what the order calls a “1-strike policy”: every account disabled and new ones blocked. And minors are barred from “romantic or sexualized interactions” with Meta’s AI chatbots.
Biedscheid stopped short of touching the features his own findings link to compulsive use. He left infinite scroll, autoplay and the recommendation algorithm in place, writing that rules for a whole industry have to come from lawmakers or regulators rather than a case against one company.
Meta isn’t accepting any of it yet. “We disagree with the ruling and will appeal,” the company said Thursday, adding that it works hard to keep people safe and remains confident in its record of protecting teens online. The five-year compliance clock pauses while an appeal is pending, as long as Meta posts a bond. So while kids in Albuquerque wait for hallway beds to open up, the company earning $174 million a day has every incentive to take the long way through the courts.
Meta had not responded to Moneywise’s request for comment (beyond its public statement) by the time of publication. The New Mexico Department of Justice could not be reached for comment beyond Attorney General Torrez’s public statement; in it, he called the ruling “a victory for every parent who has worried about what social media is doing to their child and every child who deserves to grow up safer online.”
You May Also Like
- JP Morgan sees gold hitting $6,000/oz before 2027 — and a Gold IRA lets you hold the physical metal while deferring the tax bill. Get your free guide from Priority Gold
- Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — here’s what it is and the simple steps to fix it ASAP
- Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how
- Millionaires under 43 are reshaping investing — just 25% of their portfolios are in stocks. Here’s where their money is going
Godwin Oluponmile is a content specialist, SEO strategist and copywriter with seven years of expertise in finance, Web 3.0, B2B SaaS and technology. His work has been featured in publications such as Entrepreneur, HackerNoon, Blocktelegraph and Benzinga.
