Shalom Life | May 27, 2015

Facebook, Zuckerberg and Morgan Stanley get Sued by Investors

Suit filed against the social media giant over withholding negative information from the public for its IPO

By: David Shear

Published: May 23rd, 2012 in Business » World

Facebook, Zuckerberg and Morgan Stanley get Sued by Investors

This wasn’t supposed to go like this. Facebook, the internet darling and the savior of high-tech IPOs, was supposed to go gangbuster on the financial world. Investors expected to get in early and get rich quickly, but sometimes things don’t go according to plan, especially when greed is concerned.

Yesterday news broke out that Facebook, Morgan Stanley and a host of other underwriters withheld negative information about the social network’s initial public offering. On Wednesday, three investors sued Facebook and their CEO Mark Zuckerberg, along with Morgan Stanley, for unfair conduct.

"It appears as though material information was not disclosed," said Robert Weiser, one of the plaintiff lawyers in the class action suit. "We believe that the offering was conducted unfairly and it harmed public stockholders."

According to reports of the suit, which has been filed in the U.S. District Court for the Southern District of New York in Manhattan, Morgan Stanley shared negative information regarding Facebook’s upcoming quarter results with major clients ahead of their IPO, while withholding this information from the public.

The "revisions were material information which was not shared with all Facebook investors, but rather, was selectively disclosed by defendants to certain preferred investors and omitted from the registration statement and/or prospectus," the plaintiffs claim.

Other underwriters targeted by the lawsuit include JPMorgan Chase, Bank of America, Merrill Lynch, Barclays Capital and Goldman Sachs.

It is believed that more plaintiffs may join the class action lawsuit.

Israeli Companies Make Gartner's Innovative 'Cool Vendors' List Israeli Companies Make Gartner's Innovative 'Cool Vendors' List TrendingJEDx 2015 Gives Toronto's Young Professionals a Real Life Lesson JEDx 2015 Gives Toronto's Young Professionals a Real Life Lesson TrendingNeat Israeli Pen Lets You Answer Calls and Send Texts Without Your Phone Neat Israeli Pen Lets You Answer Calls and Send Texts Without Your Phone Trending
 

WATCH: David Blatt Leaves LeBron James Hanging on a High-Five

May 27, 2015 | By Daniel Koren
WATCH: David Blatt Leaves LeBron James Hanging on a High-Five

The Israeli NBA coach and King James were caught having a pow-wow during the Cavs' romp over the Atlanta Hawks

Read More

New Bill Would Have Israeli Students Learn Both Hebrew and Arabic From the 1st Grade

May 27, 2015 | By B. Shane Morganstein
New Bill Would Have Israeli Students Learn Both Hebrew and Arabic From the 1st Grade

"Knowing the language of the other is the basis for understanding and mutual respect, which are necessary in the current situation in Israel"

Read More

Al Pacino Pulls Out of 'Nazi' Play Written by Hitler Supporter

May 27, 2015 | By Ashley Ramnarain
Al Pacino Pulls Out of 'Nazi' Play Written by Hitler Supporter

The actor had agreed to narrate in a stage adaptation of 'Hunger,' but pulled out upon discovery of author Knut Hamsun's enthusiasm for Nazism

Read More

Denver Bagel Shop Offers a Fresh Take on "Smoked" Salmon

May 27, 2015 | By B. Shane Morganstein
Denver Bagel Shop Offers a Fresh Take on "Smoked" Salmon

WATCH: Owner of Rosenberg's Bagels teaches you how to infuse lox with medical marijuana

Read More

The Michael J. Fox Foundation is Looking to Find the Connection between Parkinson's & Ashkenazi Jews

May 27, 2015 | By Ashley Ramnarain
The Michael J. Fox Foundation is Looking to Find the Connection between Parkinson's & Ashkenazi Jews

The charity announced Sunday that they are seeking volunteers to participate in a study

Read More

Season 6 of 'Comedians in Cars' Features Stephen Colbert, Julia Louis-Dreyfus, Jim Carrey & More

May 27, 2015 | By Ashley Ramnarain
Season 6 of 'Comedians in Cars' Features Stephen Colbert, Julia Louis-Dreyfus, Jim Carrey & More

The newest season of Jerry Seinfeld's topical internet show starts on June 3rd

Read More

One Republic Visits Iron Dome Before Tel Aviv Concert

May 27, 2015 | By Ami Friedman
One Republic Visits Iron Dome Before Tel Aviv Concert

American band members meet operators of Israeli missile interceptor ahead of their show at Park HaYarkon

Read More

There's a Jewish Nursing Home in the Bronx That Also Cares for Catholic Nuns

May 27, 2015 | By Daniel Koren
There's a Jewish Nursing Home in the Bronx That Also Cares for Catholic Nuns

"This is home now," says 83-year-old Sister Grace Henke. "When we first came, we were fish out of water"

Read More

More Headlines