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Re:It's Me, In an Ad, On Facebook. Is This Legal? Allowed? W... by orijing on Monday July 25, 2011 @02:16AM (#2801573)
Per Facebook's advertising guidelines [1]:

Copyrights and trademarks Ads cannot include any content that infringes upon the rights of any third party, including copyright, trademark, privacy, publicity or other personal or proprietary right. The advertiser must have intellectual property rights to the creative and be permitted to display such creative as advertising on the Facebook Site.

So yes, it is clearly not allowed, assuming that the copyright holder has not given the advertiser the permission to use his picture.

[1] https://www.facebook.com/ad_guidelines.php

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