Facebook Inc (NASDAQ:FB) and a number of banks are likely to face a lawsuit for providing misleading information to investors prior to the social media giant’s initial public offering (IPO).
In a recent statement issued by a U.S. District Judge, it has been clearly mentioned that Facebook investors can pursue loss claims, arising from non-disclosure of some material information, related to internal projections on how an increase in mobile usage could lower revenues of the company.
U.S. Judge Robert Sweet is of the opinion that the company’s risk warnings should have included the revenue cut as it had already materialized. This according to the judge was a clear case of material misrepresentation, which misguided investors.
Facebook investors include pension funds in Arkansas, California and North Carolina, who claimed to have suffered from the concealment of the material facts by the company in the IPO registration statement distributed to underwriters’ analysts.
These investors are now up against the company and seek damages resulting from the sale or holding of the shares as they fell below the IPO price and bottomed to $17.55 on Sep 4, 2012.(...)Click here to continue reading the original ETFDailyNews.com article: Facebook Inc (FB) Likely To Face LawsuitYou are viewing an abbreviated republication of ETF Daily News content. You can find full ETF Daily News articles on (www.etfdailynews.com)
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