Facebook Inc. (NASDAQ:FB) – and those investors who are currently on board, like billionaire fund manager George Soros of Soros Fund Management, and not those filing suit – received some good news late Thursday when it as announced that a pile of lawsuits surrounding the botched initial public offering of Facebook stock in May will all be consolidated in one courtroom in New York, which shot down a request by some investors who sued Facebook Inc. (NASDAQ:FB) in California.
There are about 33 lawsuits that have been filed that are seeking class-action status, many of which were investors in Facebook Inc. (NASDAQ:FB) who are suing the company, NASDAQ and the IPO underwriters for the problems that they claim caused many of their losses in the IPO. Several of the lawsuits were filed in California, where Facebook Inc. (FB) is headquartered, but a panel of judge in New York ruled that because the IPO was staged on the NASDAQ market in Manhattan, that is where all of the related lawsuits should be handled by U.S. District Judge Robert Sweet.
Many of the lawsuits by investors allege Facebook Inc. (NASDAQ:FB) released negative company information to a select group of investors at the time of the IPO. Facebook Inc. denies the allegations and in fact blames technical glitches at NASDAQ for the problems with the IPO. Several of the underwriters have been pushing for some relief from NASDAQ as a result of the problems, which delayed the start of trading on thed day of the IPO, and thus forced NASDAQ to use a slower, less efficient ordering process once trading sarted. The delays in the tansactions, the underwriters have said, exaggerated their losses.
Consolidation of these cases makes the court system run more efficiently and focuses resources, as compared to similar cases being played out simultaneously in other courtrooms around the country. There is no word yet on when the initial hearings will be held.