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Mark Zuckerberg Sued
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A new lawsuit recently filed in court claims that the founder of Facebook, Mark Zuckerberg, pulled a fast one on the company’s investors. The fast one pulled by Zuckerberg could amount to $1 billion. The lawsuit, which is a class action, was filed by Facebook shareholders. The lawsuit claims that Zuckerberg, the CEO, had inside information that the stock was overvalued. It also claims that Zuckerberg protected his finances by getting rid of a large amount of Facebook stock.

Already this is the second time in two weeks that shareholders have accused the CEO of withholding information about the company or its stocks. The lawsuit also claims that the CEO and his close business associates hid information about a foundational flaw in the business model of Facebook. That flaw was that there was not enough revenue from advertising to support a stock that was valued at $38 per share.

  
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In the lawsuit, Morgan Stanley, JPMorgan and Goldman Sachs issued the alarm prior to the IPO that the company was overvalued. The lawsuit claims that the information was only released to the largest investors of the stock. When the shares were sold at $38 apiece, Zuckerberg made $1.13 billion. If he sold the shares today, he would make only $800 million.



 

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