Legal News

Angry Shareholders Sue Facebook, Puts Pressure on NYSE
Download PDF
1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Loading...

Facebook Inc’s questionable IPO is having its ripple effects. The crowning moment of the eight-year old company is rapidly turning into an anticlimax as evinced by a lawsuit filed on Wednesday seeking class-action status. The lawsuit, against Facebook, its CEO Zuckerberg, Morgan Stanley, Goldman Sachs Group Inc and JPMorgan Chase & Co alleges that the defendants concealed “a severe and pronounced reduction” in revenue growth forecasts that resulted from the use of Facebook through the internet or through mobile devices.

The lawsuit also accuses Facebook of instructing bank underwriters to “materially lower” their forecasts to the public, and those underwriters disclosed the lowered forecasts only to their preferred investors. Samuel Rudman, a partner at Robbins Geller Rudman & Dowd, the law firm, which brought the lawsuit, said “The main underwriters in the middle of the roadshow reduced their estimates and didn’t tell everyone.”

Rudman further said, “I don’t think any investor in Facebook wouldn’t have wanted to know that information.”

  
What
Where


While the law firm, which is one of the leading securities class action firms of the nation is sure of its action and proof, Facebook claims to have maintained its face, and Andrew Noyes, a Facebook spokesperson told the media “We believe the lawsuit is without merit and will defend ourselves vigorously.”

On the same day the lawsuit was filed, the Knight Capital Group Inc said that its second quarter results would be hurt by numerous issues including losses related to the Facebook listing. The firm predicts that it will suffer a pre-tax loss between $30 million and $35 million only from the Facebook related IPO.

The company has followed up with submission of claims for financial compensation from Nasdaq OMX and is considering all other legal avenues. Knight Capital has made a regulatory filing.

Get JD Journal in Your Mail

Subscribe to our FREE daily news alerts and get the latest updates on the most happening events in the legal, business, and celebrity world. You also get your daily dose of humor and entertainment!!




Another investor sued the Nasdaq OMX directly claiming that the exchange operator acted negligently while handling the orders for Facebook shares.

Morgan Stanley announced that it is reviewing Facebook trades and would adjust prices for some retail customers who had to overpay.



Wednesday’s lawsuit is one of several such lawsuits that have been filed against Facebook’s IPO across the country.

The case is Brian Roffe Profit Sharing Plan et al v. Facebook Inc et al, U.S. District Court, Southern District of New York,No. 12-04081.



 

RELEVANT JOBS

Paralegal

USA-CA-Rancho Cucamonga

Paralegal position available at a general practice law firm in Rancho Cucamonga. We are looking for ...

Apply now

Paralegal / Legal Assistant

USA-VA-Vienna

Description A small, highly respected family law firm located in Tyson\'s Corner, Virginia seeks ...

Apply now

LITIGATION ATTORNEY (PL/BL 5-8)

USA-CA-San Diego

Experienced civil litigation attorney with 5-8 years of experience to handle complex and business li...

Apply now

Paralegal / Legal Assistant

USA-NV-Las Vegas

Qualifications Experience: Paralegal, 5 years (Preferred) Full Job De...

Apply now

BCG FEATURED JOB

Locations:

Keyword:



Search Now

Environmental And Land Use Associate Attorney

USA-NY-New York City

New York City office of a BCG Attorney Search top ranked law firm seeks Environmental and Land Use A...

Apply Now

Litigation Associate Attorney

USA-UT-Saint George

St. George office of our client seeks Litigation Associate Attorney with 1 year of experience. The c...

Apply Now

Partner-level Associate Attorney

USA-NY-New York City

New York City office of our client seeks Partner-level Associate Attorney with 18 years of litigatio...

Apply Now

Most Popular

SEARCH IN ARCHIVE

To Top