Facebook and Zuckerberg could face lawsuit for ‘misleading’ investors before IPO
Facebook, its chief executive Mark Zuckerberg and several banks could face a lawsuit for ‘misleading’ investors ahead of its 2012 IPO, a US federal judge has said.
US district judge Robert Sweet said yesterday in an 83-page decision that Facebook could have disclosed internal projections, adding: “Purported risk warnings misleadingly represented that this revenue cut was merely possible when, in fact, it had already materialised."
Some investors have claimed that Facebook negligently concealed material information from its IPO registration statement that it had provided to its underwriters' analysts.
Shares in Facebook slid by 18 per cent in the two days following its IPO. At time of writing, Facebook shares stood at $55.57 on Nasdaq.
Facebook has not replied to a request for comment from The Drum.