back to article Zuckerberg IN COURT: Judge rules Facebook investors CAN sue for IPO non-disclosures

A US judge has decided that Facebook, Mark Zuckerberg and a bunch of banks will face a lawsuit accusing them of misleading investors about its $16bn initial public offering. District Judge Robert Sweet in Manhattan said that investors should be allowed to pursue their claims that Facebook and the banks running its IPO were …


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  1. volsano

    Privacy's a bitch, eh?

    1. Anonymous Coward
      Anonymous Coward


      "Privacy's a bitch, eh?"


      1. h4rm0ny

        Re: ?

        >>"Privacy's a bitch, eh?"


        Facebook wanted to keep their estimates private. The court says Facebook has no inherent right to do so. GP finds this ironic given that Facebook is one of the foremost reducers of privacy in the world.

  2. DrStrangeLug

    Mobile markets?

    It might help 'mobile markets' performance if their mobile app didnt slow the phone down some much and require so many privileges.

  3. Don Jefe

    A judge allowing a suit does not mean there is anything valid about a suit, just that the judge will let you try to argue validity is hiding in there somewhere.

    There's a real misunderstanding of what publicly traded companies are required to disclose and report both in their IPO filings and their quarterlies. It really isn't much in the way of information and the manner in which you disclose it can be as Byzantine and unintelligible as you want to make it. One if any CEO's primary tasks is to issue statements which include the truth, but are positioned in a way that the truth is obfuscated. There's no line on the 10-Q that's says 'describe your detailed operations and strategies', you can be vague and misleading as hell if you've got command of the language. As a rule the more the CEO talks the greater likelihood of something being wrong.

    Anyway, investing in stocks, especially IPO's is a risky endeavor. You aren't going to win every time, if that was the case that would be all that anybody did, trade investments. The current fad of suing companies because your investment didn't pay off is nothing more than skeezy lawyers trying to make a buck, it's the same class of lawyer that speculatively sues P2P users and pharmaceutical companies hoping something gets traction.

    Those are the people that need behavior corrections and who are destabilizing everything simply for the sake of greed. They're taking advantage of people who really shouldn't be messing in the stock market anyway, and making them believe there are no risks. It's a shitty thing to do.

    1. Tom 13

      @ Don Jefe

      You've quite missed the point. Making or losing money on the offering isn't the issue. This case is being pursued for what it is: insider trading. Facebook made available certain inside information to certain financial organizations and brokers that it didn't make available to other financial organizations and brokers. Which is strictly prohibited by law. And it doesn't matter where you land relative to expectations.

      1. Don Jefe

        Re: @ Don Jefe

        No, as usual, you're oversimplifying the issue. Insider trading nor fraud allegations are being brought. Retread the article, or if you're feeling up to it, read the actual summary of the suit. They just didn't like the fact they went with the analysts predictions. Alternatively you can just carry on, and live in Tom-land. It doesn't sound like a happy place there though.

        1. Tom 13

          Re: @ Don Jefe

          Ah clueless progressive as usual. Stock holders don't get to bring insider trading allegations, that's the SEC. If you are stock holder this is EXACTLY the sort of suite you'd bring.

          You're right about my residence not being a happy place. Too many idiots like you casting ballots and claiming knowledge they don't actually have. But I'll survive.

      2. Anonymous Coward
        Anonymous Coward

        Re: @ Don Jefe


        The social network told its analysts that it no longer expected to meet its earlier revenue projections and those analysts immediately passed on that information to its "most important potential investors".


        "However, analysts other than the Syndicate Analysts, who had not been called by Facebook, continued to widely expect Facebook to report revenues in line with Facebook's original guidance given in April."

        Would imply a certain amount of Laissez-faire

  4. websey

    I believe that they shouldnt be able to sue facebook, but then I dont think companies that bring no value to the human race should exist :? either way it dont effect me.

    I wonder if they will post this on the facebook blog? I wonder how many likes they would get, or all the dislikes (reg article the otherday) now that so many of their users are mobile !!

  5. wikkity

    lack of returns ... would affect future revenues

    Do investors really need this to be spelled out for them?

  6. ratfox Silver badge

    What are they com[plaining about?

    The stock price is way above what they bought it for at the IPO.

    …Oh, you mean they actually sold the stock while it was low? I think they did not quite get how to make money on the stock market. The secret is "Buy low, sell high". Not the reverse.

  7. Ian Michael Gumby Silver badge

    "The social network told its analysts that it no longer expected to meet its earlier revenue projections and those analysts immediately passed on that information to its "most important potential investors"."

    This is a Rule FD violation.

    Meaning that they didn't disclose all of the information to everyone but only to a select subset... there is grounds for the basis of a lawsuit because the information not disclosed would be considered material information.

  8. Marketing Hack Silver badge

    Yep, sounds like preferential treatment to me.

    If an issuing company can forsee an adverse event, they have to share it with all the potential investors, not just a favored few. Sounds like Zuck is eventually going to pay up!

    (Why is the choral version of "Special" suddenly wafting through my mind?)

  9. JaitcH

    Golden rule ...

    if Goldman Sachs is involved, RUN, likely all the opportunities for profit making have gone.

  10. Charles Manning

    Would disclosure really have changed this behaviour?

    Many, many thousands of "FB Invesduhs" just bought shares because it was a trendy thing to be part of FB and have a share certificate to show to friends. Now FB is getting a bit meh and those FBtards are feeling a bit sheepish and want to blame someone else for their rashness.

    The truth is that none of this class of invesduhs did any due diligence or analysis, so it would be completely disingenuous to say they were mislead. They would have bought the shares at pretty much any price.

    Sure, there are many others with a slightly more substantive case, but face it folks, FB IPO was pretty obviously overhyped and anyone expecting to make a killing on the IPO was foolish.

    It stuns me that FB has actually been able to recover from the post-IPO tank. I wonder how long the current love will last. But, hey event Y! Shares! have doubled during the last year!

  11. codeusirae

    Business as usual ..

    "Shareholders say 'important investors' were given different info to world+dog"

    Isn't this the way the financial system is supposed to work, the financial houses live off the smaller marks, er, I mean 'investor' ..

  12. Gannon (J.) Dick

    "He pointed out that demand for Facebook stock was still sky high. So high, in fact, that the firm was able to increase both the size and the price of the IPO, a rare occurrence that has only happened in 3.4 per cent of all IPOs since 1995."

    The difference between world trade and what Wall St. does hinges on "Most Favored Bank Robber Status" which insures a lucrative time slot for the robbing - e.g. early in the morning of (everyone else's) payday. It is rare occurrence when this doesn't work better than random mayhem ...

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