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Facebook Investors Want Class Action Lawsuits Centralized in New York
By Sarah Pierce
UPDATE: A federal panel on October 4 ordered all potential Facebook IPO class action lawsuits consolidated in New York.
Facebook investors involved in dozens of securities fraud lawsuits against the social network asked a judicial panel last week to pool together the cases in Manhattan federal court. The panel made no immediate ruling, but did not question the motion to hear the Facebook securities lawsuits in a New York court. Plaintiffs are seeking class-action status for Facebook investors who suffered major losses during the company’s IPO in May.
Facebook investors have filed at least 33 potential class action lawsuits against the company, its officers, directors and underwriters, alleging they violated federal securities laws by making false and misleading statements in connection with the IPO.
The potential stock fraud class action lawsuits allege Facebook selectively disclosed unflattering information about its business prospects to Wall Street analysts who then shared it with select investors — specifically that the company anticipated a significant drop in ad revenue due to an increased number of users accessing Facebook through mobile devices.
Facebook investors say they also lost money due to technical glitches on the Nasdaq stock market, a charge Facebook maintains was out of its control. Separate Facebook investor lawsuits have been filed against NASDAQ OMX Group, Inc. alleging it negligently failed to execute trades during the record-breaking Facebook IPO.
Plaintiffs in the Facebook securities fraud class action lawsuits are seeking unspecified damages. Even though dozens of lawsuits have been filed across the country, parties on both sides agree that the cases should be processed in New York because that’s where witnesses, IPO evidence and the underwriter banks are located.
The judicial panel is expected to issue a decision within weeks.
The case is In Re: Facebook Inc., IPO Securities and Derivative Litigation, Case No. 12-md-2389, U.S. Judicial Panel on Multidistrict Litigation.
Were you a victim of stock fraud, securities fraud or investment fraud? You may have a case to file class action lawsuit against the parties responsible. Visit the Securities Fraud, Stock Fraud Investment Class Action Lawsuit Investigation for details.
Updated October 16th, 2012
All securities fraud class action and lawsuit news updates are listed in the Stocks & Securities section of Top Class Actions
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