Facebook served new lawsuit
Wilmington, March 5: A Facebook shareholder has sued the social networking company’s chief executive Mark Zuckerberg and others over its troubled IPO, potentially reviving legal claims that a different court dismissed in February.
The lawsuit by Gaye Jones alleges that the company’s directors and officers knew that Facebook did not disclose weaker revenue trends as more users accessed the website through mobile devices. The complaint alleges that information had been selectively shared with the company’s IPO underwriters and key investors.
Unlike similar lawsuits that were dismissed last month partly because the shareholders did not own the stock when the alleged misconduct took place prior to Facebook’s May IPO, Jones has owned Facebook stock since
The complaint alleges that information had been selectively shared with Facebook’s IPO key investors
February 2012. The lawsuit seeks to force the directors and other defendants to disgorge the money they made from selling stock through the IPO which they allegedly knew was overpriced.
“The defendants were unjustly enriched because they realised enormous profits and financial benefits from the IPO, despite knowing that reduced revenue and earnings forecasts for the company had not been publicly disclosed to investors,” said the complaint.
Facebook said in a statement that “we believe this lawsuit is without merit and will defend ourselves vigorously.”
Shares in Facebook’s highly anticipated IPO fell from the initial price of $38 to about $25 within a month. The company’s stock closed on Monday at $27.72 on Nasdaq, down by six cents. — Reuters