Bill Ackman condemns Visa Inc for facilitating child pornography

Visa Inc (NYSE: V) is not playing the role it potentially can in forcing “MindGeek” into removing child pornography from its partner websites, including Pornhub, says Bill Ackman. He’s the Founder and CEO of Pershing Square Capital Management.

Ackman blasts Visa on CNBC’s ‘Squawk Box’

Last week, a California District Court refused to discharge the payments company from a child pornography lawsuit for “knowingly” facilitating the criminal activity. On CNBC’s “Squawk Box”, Ackman said:

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Visa continued to provide payment services until the Kristof article. Then they shut down, which would have bankrupted them. But within a matter of weeks, they reauthorised the merchants and they started accepting payments again.

Ackman confirmed that he doesn’t have an economic stake in Visa Inc and is willing to “philanthropically” finance lawsuits against it. Visa shares are down 3.0% on Tuesday.

Read Nicholas Kristoff’s article in New York Times in full here.

Visa has the power to shut down MindGeek

Despite the stock market news, Wall Street has a consensus “buy” rating on Visa Inc.

The fact that Visa continues to do business with the likes of MindGeek, Ackman added, represents a huge failure of corporate governance, for which the financial services company must be held liable.

The ultimate regulator is Visa. It could shut down MindGeek tomorrow. And yet, Visa continues to provide payment services to Pornhub and advertising that takes place on Pornhub premium services.

Visa, however, says the ruling “mischaracterises” its role and authority over conduct on the pornography websites and finds itself an “improper defendant” in the lawsuit.

Last week, the world’s largest payments’ network crushed Street estimates for its fiscal third quarter.