Facebook is being sued by investors in New York and California claiming that the IPO documents were filled with misleading information.
The Associated Press reports that on Wednesday four days after Facebook’s IPO, the social network’s shares climbed 1 dollar, to almost 32 dollars. But this is still 16 percent below its IPO price, announced on Friday – 38 dollars. The investors started to accuse the banks of arranging the Initial Public Offer and of sharing crucial information regarding the business prospects of FB with only a part of the clients.
A number of investors who bought stock in the Initial Public Offer have sued Facebook, and IPO’s lead underwriter, Morgan Stanley. They believe the offer was arranged by the banks and some clients benefited from important information regarding Facebook future in the business world, while others were left uninformed, or worse, misinformed.
One lawsuit, which was filed by three investors in New York, states that the documents of the social network’s offer contained false information, on the one hand, and was lacking in crucial information, on the other hand. The three plaintiffs claim the trading caused them damages.
Other lawsuits were filed in California, making the same accusations.
Morgan Stanley did not offer any comments on the matter, while Facebook responded that the allegations have no real basis.