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Hausfeld LLP Files a Class Action Lawsuit on Behalf of All Purchasers of Facebook Common Stock

On June 12, 2012, Hausfeld LLP filed a class action lawsuit in the United States District Court for the Southern District of New York on behalf of all purchasers of Facebook, Inc. (“Facebook”) common stock. Plaintiff alleges that Facebook, certain of its directors and officers, and the underwriters of Facebook’s initial public offering violated the Securities Act.

The Complaint alleges that Facebook filed a Registration Statement and Prospectus (the “Offering Documents”) with the SEC that were false and misleading in violation of the Securities Act. Further, the Complaint states that, in the Offering Documents, defendants failed to disclose a marked reduction in revenue growth that Facebook was experiencing at the time of the offering due to an increase in the number of users accessing Facebook through its mobile application or through the mobile version of its website. The complaint further alleges that before the IPO commenced, Facebook or one of its officers or directors informed several underwriters of Facebook’s reduced earnings projections, causing those underwriters to reduce their performance estimates for Facebook in the second quarter of 2012 and full-year 2012. The complaint also contends that these revised projections were material information which was not shared with all investors, but rather, was selectively disclosed by defendants to certain preferred investors and omitted from the Registration Statement and/or Prospectus. Plaintiff seeks to recover damages on behalf of all purchasers of Facebook common stock pursuant and/or traceable to the Company’s IPO. 

The defendants to this action are Facebook, certain of its directors and officers (Mark Zuckerberg, David A. Ebersman, Sheryl K. Sandberg, David M. Spillane, Marc L. Andreessen, Erskine B. Bowles, Donald E. Graham, Reed Hastings, and Peter A. Thiel), and the underwriters for Facebook’s IPO (Morgan Stanley & Co. LLC; JP Morgan Securities LLC; Goldman, Sachs & Co.; Merrill Lynch, Pierce, Fenner & Smith Inc.; Barclays Capital Inc.; Allen & Company LLC; Citigroup Global Markets Inc.; Credit Suisse Securities (USA) LLC; Deutsche Bank Securities Inc.; RBC Capital Markets, LLC; Wells Fargo Securities, LLC; Blaylock Robert Van LLC; BMO Capital Markets Corp.; C.L. King & Associates, Inc.; Cabrera Capital Markets, LLC; Castleoak Securities, L.P.; Cowen and Company, LLC; E*TRADE Securities LLC; ITAU BBA USA Securities, Inc.; Lazard Capital Markets LLC; Lebenthal & Co., LLC; Loop Capital Markets LLC; M.R. Beal & Company; MacQuarie Capital (USA) Inc.; Muriel Siebert & Co., Inc.; Oppenheimer & Co. Inc.; Pacific Crest Securities LLC; Piper Jaffray & Co.; Raymond James & Associates, Inc.; Samuel A. Ramirez & Company, Inc.; Stifel, Nicolaus & Company, Incorporated; The Williams Capital Group, L.P.; and William Blair & Company, L.L.C.). 

For more information, please contact attorney William P. Butterfield in our Washington, DC office.

 

 

Supporting Documents

» Complaint (PDF)

Practice Areas: Securities and Financial Services