Facebook IPO Lawsuits Consolidated in New York

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Facebook investors won their motion to consolidate dozens of securities fraud lawsuits filed throughout the United States over the bungled Facebook IPO before a federal judge in New York. The social networking behemoth, NASDAQ exchange and Facebook’s underwriter’s face over 30 lawsuits seeking class-action status on behalf of Facebook investors who suffered major losses during the company’s initial public offering in May.

A panel of federal judges ordered the potential Facebook IPO class action lawsuits to be transferred to U.S. District Judge Robert Sweet in Manhattan. The move was requested by Facebook and the majority of investor Plaintiffs because witnesses, IPO evidence and the underwriter banks are located in New York. Only a few investors sought to keep their cases in California.

Investors allege in the potential Facebook IPO class action lawsuit that the company, its officers, directors and underwrites violated securities laws by making false and misleading statements in connection with the May 18 IPO, which was tarnished by technical glitches on the NASDAQ exchange and accusations that Facebook selectively disclosed unflattering information about its business prospects to privileged investors.

Facebook stock (NASDAQ:FB) tumbled as much as 50 percent after its debut.

Plaintiffs in at least 33 Facebook stock fraud lawsuits are asking the Court to hold Facebook and its underwriters responsible for their losses. They are seeking unspecified damages, which could cost Facebook millions of dollars.

Facebook has said that it did not violate any rules and that NASDAQ was to blame for trading glitches on the day of the offering. Separate Facebook investor class action lawsuits have been filed against NASDAQ OMX Group, Inc. alleging it negligently failed to execute trades during the record-breaking Facebook IPO.

The newly consolidated case is In Re: Facebook Inc., IPO Securities and Derivative Litigation, Case No. 12-md-2389, U.S. Judicial Panel on Multidistrict Litigation.