Facebook IPO-Related Lawsuits Rejected
Facebook and co-founder and CEO Mark Zuckerberg are off the hook when it comes to some shareholder lawsuits related to its contentious initial public offering in May 2012.
Facebook and co-founder and CEO Mark Zuckerberg are off the hook when it comes to some shareholder lawsuits related to its contentious initial public offering in May 2012.
Reuters reported that the Second U.S. Circuit Court of Appeals ruled against shareholders who claimed that they lost money on Facebook shares following its IPO because the company’s directors and underwriters–the latter led by Morgan Stanley–did not properly disclose potential threats to the social network’s growth prospects.
Other defendants included Facebook chief operating officer Sheryl Sandberg, Goldman Sachs and JPMorgan Chase.
The shareholders claimed that Facebook warned its underwriters about its internal projections regarding increased mobile usage and how it might impact future revenue, causing the underwriters to slash their earnings forecasts, adding that those projections should have been made public.
However,
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