Facebook Inc. (FB) May Face IPO Lawsuits in Manhattan

Facebook Inc. (NASDAQ:FB) investors took it on the chin when they jumped in and bought stock before the company’s much-anticipated but disappointing IPO in May. And more than a handful of investors are not accepting the events of that IPO as just part of risk-taking – they are seeking class-action status to sue Facebook, the NASDAQ and underwriters of the IPO to try to recover losses they claim could have been prevented.

Facebook Inc. (FB)

There was a hearing Thursday before the Judicial Panel on Multidistrict Litigation in Manhattan, where both sides moved to ask that all of the lawsuits be handled in a New York courtroom – Facebook Inc. (NASDAQ:FB) is facing at least 33 lawsuits that have been filed in several states. The argument to have all of the cases held in New York is due to the ease of access to documents and witnesses germane to the IPO are housed in Manhattan. Virtually all of the attorneys representing the various parties spoke on the same side in favor of consolidating all of the cases in one jurisdiction.

The exception, however, came from a couple of derivatives lawsuits filed in California, in which these plaintiffs were suing the Facebook Inc. (NASDAQ:FB) board of directors and CEO Mark Zuckerberg for damages. Those lawsuits are looking to be tried in California, as Facebook is based there and many of the witnesses and evidence surrounding those cases are based on the Left Coast.

Most of the Facebook Inc. (NASDAQ:FB) cases are already in New York before Judge Robert Sweet. A final decision on the disposition of these cases is expected in several weeks. NASDAQ, which expressed affirmation about the cases being in New York, however stated that its lawsuits are not much in common with the Facebook lawsuits and thus should be handled separately.

In the multitude of these cases which seek class-action status, Facebook Inc. (NASDAQ:FB) and IPO underwriters are being claimed responsibility for the losses incurred in the IPO. Investors claim they lost money due to technical issues on the NASDAQ market and they say Facebook revealed negative information about its future to market analysts, who then shared the information with preferred investors.

While it will be a while before these cases actually get to trial, Facebook Inc. (NASDAQ:FB) will likely spend millions defending itself against these nearly three-dozen cases, which of course will affect its bottom line in the near-term. That means investors like hedge-fund manager George Soros of Soros Fund Management may need to take a very long position in order to see returns.

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

The 10 Highest Suicide Rates by Profession

The 20 Most Underrated Movies of All Time

The 10 Fastest Growing Companies in America

The 10 Biggest Outlet Malls in USA

The 5 Most Popular Rap Songs of All Time

The 10 Countries that Eat the Most Meat

The10 Most Expensive Countries to Fly To

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!