Facebook Investor IPO Lawsuits Sent to New York Judge
By Joe Schneider – Oct 5, 2012 12:15 AM ET
Facebook Inc. (FB) investor lawsuits over the social media company’s initial public offering will be heard by a New York federal judge, a seven-judge panel ruled.
The U.S. Judicial Panel on Multidistrict Litigation ordered yesterday that 41 lawsuits filed in California, Florida and New York be consolidated before Robert Sweet in federal court in Manhattan.
The investors sued after a drop in Facebook’s stock after it started trading in May. The investors claim Facebook failed to disclose discussions it had with underwriters’ analysts about its growth in advertising and the analysts revised their earning forecasts and gave the information to “preferred investors,” according to the panel’s ruling. Facebook closed yesterday in New York at $21.95, below the IPO price of $38.
Eight of the lawsuits were filed against Nasdaq, alleging it caused technical and other trading-related errors that created market uncertainty and caused investor losses.
Nasdaq opposed consolidation of the lawsuits involving Facebook and itself.
“Though the Nasdaq actions involve different defendants and claims from those in the securities and derivative actions, they do include enough common questions of fact, related circumstances and common discovery to warrant centralization,” the panel said.
The case is In Re: Facebook Inc. IPO Securities and Derivative Litigation, MDL 2389, U.S. Judicial Panel on Multidistrict Litigation (Washington).
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