Hagens Berman: 12 Days Remain Before July 23, 2012, Deadline in Securities Case Against Facebook -- FB
Published on Tuesday, 10 July 2012 20:01 Written by TradersHuddle Staff
SAN FRANCISCO, July 10, 2012 (GLOBE NEWSWIRE) -- Hagens Berman Sobol Shapiro, an investor-rights law firm, is today reminding investors that only 12 days remain before the July 23, 2012, lead plaintiff deadline in a securities class action filed against Facebook (Nasdaq:FB).
This lawsuit, filed by Hagens Berman on May 24, 2012, was filed in the United States District Court for the Northern District of California, as Chang et al. v. Facebook, Inc. et al., case number 12-cv-2680. It alleges that Facebook, Inc., Mark Zuckerberg, David A. Ebersman, David M.Spillane, Marc L. Andreesen, Erskine Bowles, James W. Breyer, Donald E Graham, Reed Hastings, Peter Thiel, Morgan Stanley & Co. LLC (NYSE:MS), J.P. Morgan Securities LLC (NYSE:JPM), Goldman, Sachs & Co. (NYSE:GS), Merrill Lynch (NYSE:BAC), Peirce, Fenner & Smith Incorporated and Barclays Capital Inc. (NYSE:BCS) violated Section 11, 12 and 15 of the Securities Act of 1933.
Please note that any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
Hagens Berman's lawsuit alleges that defendants violated federal securities laws by omitting material information in their registration statement and prospectus, and by selectively disclosing this material information to their premier clients and preferred investors prior to the IPO.
For those interested in reading the complaint, it can be accessed here.
The complaint alleges that Facebook privately pre-announced that its second quarter would fall short of analysts' estimates. It is alleged that Facebook only told their underwriters' analysts and directed them to change their estimates which were then verbally conveyed to preferred clients. As a result, many of the underwriters' large clients said they would only buy at $32.00 per share, according to the lawsuit.
Knowing from research that many retail investors were willing to pay $43.00 per share, the lawsuit alleges that Facebook increased its allocation to retail investors to reach its $100 billion goal at an offering price of $38.00 per share. This resulted in the stock shooting up above $43.00, according to the suit, but without the demand from the large institutional investors who knew the estimate revisions, Facebook's stock plummeted to around $32.00 per share within three days.
The Senate Banking Committee and the House Committee on Financial Services are investigating the issues surrounding Facebook's IPO. On May 22, 2012, the Financial Industry Regulatory Authority and the Securities and Exchange Commission also announced they will review allegations of impropriety around Facebook's IPO.
Hagens Berman Sobol Shapiro LLP is an investor-rights class-action law firm with offices in 10 cities. The firm represents whistleblowers, workers and consumers in complex litigation. More about the law firm and its successes can be found at www.hbsslaw.com. The firm's securities law blog is at www.meaningfuldisclosure.com.
The Hagens Berman, LLP logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7777
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