Shalom Life | September 20, 2014

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.

Startup Club: On-Track Solutions Startup Club: On-Track Solutions TrendingNeed A Better Way To Express Yourself? Try Jewish Emojis Need A Better Way To Express Yourself? Try Jewish Emojis TrendingDigital Torah: The Great Unifier Digital Torah: The Great Unifier Trending
 

The Ten Best Deli's in North America

September 19, 2014 | By Caitlin Marceau
The Ten Best Deli's in North America

Got a hankering for a smoked meat sandwich? Look no further

Read More

New Study Suggests Artificial Sweeteners Harmful For Diabetics

September 19, 2014 | By Caitlin Marceau
New Study Suggests Artificial Sweeteners Harmful For Diabetics

A new study From Israel cautions diabetics to think twice about sugar substitutes

Read More

Daniel Radcliffe Repays His Debt to Irish Football Team Two Years Later

September 19, 2014 | By Sara Torvik
Daniel Radcliffe Repays His Debt to Irish Football Team Two Years Later

'The F Word' star paid back the cab fare he borrowed while partying with the team.

Read More

Seth Rogen Teams Up With Adam McKay and Ben Schwartz For New Film

September 19, 2014 | By Sara Torvik
Seth Rogen Teams Up With Adam McKay and Ben Schwartz For New Film

The 'This Is The End' star will also be producing.

Read More

Joan Rivers Writes Forward For New Jewish Cookbook

September 19, 2014 | By Sara Torvik
Joan Rivers Writes Forward For New Jewish Cookbook

The comedian contributed some Jewish jokes and sentiments for 'Eating Delancey: A Celebration of Jewish Food'

Read More

Robert Downey Jr. To Be Honored At Britannia Awards

September 19, 2014 | By Sara Torvik
Robert Downey Jr. To Be Honored At Britannia Awards

The 'Iron Man' star will be joined by Mark Ruffalo, Judi Dench, Emma Watson, and others

Read More

James Franco Says ‘Alien’ From ‘Spring Breakers’ is Most Relatable Character

September 19, 2014 | By Sara Torvik
James Franco Says ‘Alien’ From ‘Spring Breakers’ is Most Relatable Character

The actor thinks that he's very similar to the corn-rowed, gun-toting character from Harmony Korine's film.

Read More

Jamie Geller And Tom Franz Explore The Bible’s Superfoods

September 19, 2014 | By Caitlin Marceau
Jamie Geller And Tom Franz Explore The Bible’s Superfoods

Two of Israel's most renown Kosher chefs explore biblical foods in the City of David

Read More

More Headlines