Facebook investor lawsuits consolidated under Manhattan judge
05 Oct 2012
A seven-judge panel has ruled that Facebook investor lawsuits over the social media's initial public offering would be heard by a New York federal judge.
The US judicial panel on multidistrict litigation called for consolidation of 41 lawsuits filed in California, Florida and New York before judge Robert Sweet in federal court in Manhattan.
The investors sued following a drop in Facebook's stock after it start of trading in May. According to the investors, 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. The social network closed yesterday in New York at $21.95, below the IPO price of $38.
Eight of the lawsuits were filed against Nasdaq over allegations it caused technical and other trading-related errors leading to market uncertainty which resulted in 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.
