The number of fake shares on Facebook has surged from about a dozen to nearly 300, according to a new report from a Cambridge-based firm.
The study was released as the company was forced to suspend trading in shares after an SEC investigation into its trading platform.
“We don’t believe Facebook’s stock is being sold for profit,” said the report’s author, David Rifkin, of Cambridge Analytica.
“The company is clearly being run for profit and is using a platform to market its shares to investors, not shareholders.”
Facebook stock plunged on the news, trading down more than 5% at the time of publication.
But its share price has recovered slightly since then.
“This is not a case of Facebook being run by greedy insiders,” Mr Rifkins said.
“There are some legitimate concerns about how Facebook is running the business, but there’s no question that the business is being run to benefit the company’s shareholders.”
The study found that the share price of the social network has risen more than 80% in the past year, driven by its huge advertising revenue, which is a large portion of its profit.
But the number of shares being sold is also up substantially.
In November 2015, Facebook had more than 1.2 billion shares outstanding, up from 929 million in October 2014.
That meant that as of the end of November, the company had more shares in its stock than it had in the entire year of 2014.
The report, titled “Facebook, the Biggest Market in the World: The New Big Lie”, found that as Facebook’s market capitalisation rose from about $30 billion to $62 billion, it was selling shares at a premium.
The company said it had been able to make up the losses by selling smaller amounts of shares that were not yet publicly available.
Facebook had previously disclosed that the number it sold during the year to date was between 8% and 10%.
However, the report found that over the past three years, Facebook has made a profit of more than $60bn.
“Facebook is the biggest market in the world,” said Mr Riskin.
“But it is being managed for a profit.”
The company has also had a number of other scandals in recent months, including a lawsuit over its use of fake news to spread divisive political messages.
In July, it lost a court battle against the US Federal Trade Commission (FTC) over its role in a program that allows websites to advertise for customers, with one of the FTC’s commissioners alleging that the company paid a commission of more $400,000 per advertising target.
Mr Rizwan Siddiqui, the head of the SEC’s Division of Enforcement, said the investigation into Facebook was continuing.
“If we can find evidence of wrongdoing, we will take it seriously,” he said.
Facebook said it was reviewing the report and the report was part of its ongoing investigation.
The SEC declined to comment on the study.
Facebook declined to say how much it had paid in fines and penalties, saying it would not provide such information.