Facebook Claims Conflict Of Interest, Seeks Dismissal Of Derivative Lawsuit

Can the same law firm unsuccessfully bid to lead a class-action suit against a company, and then file a related derivative lawsuit against the same company? Facebook says no, requesting in a filing with Delaware's Court of Chancery that the derivative suit filed by Robbins Geller Rudman & Dowd be thrown out due to a conflict of interest, but its argument may stand on shaky ground.

Can the same law firm unsuccessfully bid to lead a class-action suit against a company, and then file a related derivative lawsuit against the same company? Facebook says no, requesting in a filing with Delaware’s Court of Chancery that the derivative suit filed by Robbins Geller Rudman & Dowd be thrown out due to a conflict of interest, but its argument may stand on shaky ground.

Thomson Reuters News & Insight reported that the law firm was one of the bidders to lead a class-action lawsuit by investors related to Facebook’s initial public offering, and, as such, it should not be able to sue the company.

According

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