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Facebook, Zuckerberg, banks must face IPO lawsuit: judge

19
Dec
2013

By Jonathan Stempel NEW YORK (Reuters) – Facebook Inc, Chief Executive Mark Zuckerberg and dozens of banks must face a lawsuit accusing the social media company of misleading investors about its health before its $16 billion initial public offering, a federal judge said. In a decision made public on Wednesday, U.S. District Judge Robert Sweet in Manhattan said investors could pursue claims that Facebook should have prior to its May 2012 IPO disclosed internal projections on how increased mobile usage and product decisions might reduce future revenue. Plaintiffs have sufficiently pleaded material misrepresentation(s) that could have and did mislead investors regarding the companys future and current revenues. In a statement, Facebook said: We continue to believe this suit lacks merit and look forward to a full airing of the facts. Facebook went public at $38 per share. Investors including pension funds in Arkansas, California and North Carolina claimed that Facebook negligently concealed material information from its IPO registration statement that it had provided to its underwriters analysts.

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