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Facebook Faces Securities Class Action


Philadelphia, PA: A securities class action lawsuit has been filed on behalf of all persons who purchased the common stock of Facebook, Inc, pursuant and/or traceable to the Company's May 18, 2012 initial public offering (the "IPO" or the "Offering"), against the Company and certain individual defendants and the lead underwriters of the IPO for violations of the Securities Act of 1933.

Facebook operates a social networking company worldwide. On or about May 16, 2012 Facebook filed with the SEC a Registration Statement for the IPO. On May 18, 2012, the Prospectus with respect to the IPO became effective and 421 million shares of Facebook common stock were sold to the public at $38/share, thereby valuing the total size of the IPO at more than $16 billion.

The Complaint alleges that the Registration Statement and Prospectus contained untrue statements of material facts, omitted to state other facts necessary to make the statements made not misleading and were not prepared in accordance with the rules and regulations governing their preparation. Specifically, defendants failed to disclose that Facebook was experiencing a severe reduction in revenue growth due to an increase of users of its Facebook app or website through mobile devices rather than a traditional PC such that the Company told the Underwriters to materially lower their revenue forecasts for 2012. And, defendants failed to disclose that during the roadshow conducted in connection with the IPO, certain of the Underwriter reduced their second quarter and full year 2012 performance estimates for Facebook, which revisions were material information which was not shared with all Facebook investors, but rather, selectively disclosed by defendants to certain preferred investors and omitted from the Registration Statement and/or Prospectus.

As of May 22, Facebook common stock was trading at approximately $31/share, or $7/share below the price of the IPO. Plaintiffs and the Class have suffered losses of more than $2.5 billion since the IPO.

Plaintiffs are represented by Law Offices Bernard M. Gross, P.C. The firm has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.

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LEGAL ARTICLES AND INTERVIEWS

Facebook-Related Securities Lawsuits Growing
Facebook-Related Securities Lawsuits Growing
June 15, 2012
New York In addition to securities lawsuits filed against Facebook, a class-action lawsuit has been filed against Nasdaq OMX Group Inc, alleging Nasdaq's problems on May 18—related to the Facebook IPO—should have been prevented. Facebook itself faces an investigation into how it handled its IPO and also faces securities lawsuits, alleging the company withheld material information from investors.
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