Facebook IPO lawsuits to be heard in New York

Fri Oct 5, 2012 5:44am IST

The Nasdaq logo is seen on the exterior of the Nasdaq MarketSite as a headline about the Facebook stock scrolls on the Times Square Newsticker, in New York, May 22, 2012. REUTERS/Brendan McDermid

The Nasdaq logo is seen on the exterior of the Nasdaq MarketSite as a headline about the Facebook stock scrolls on the Times Square Newsticker, in New York, May 22, 2012.

Credit: Reuters/Brendan McDermid

Related Topics

Stocks

   

(Reuters) - Dozens of lawsuits against Facebook Inc (FB.O), the NASDAQ exchange (NDAQ.O) and various underwriters will be consolidated before a federal judge in New York, who must sort through the legal aftermath of Facebook's botched initial public offering.

A panel of federal judges on Thursday ordered that cases filed around the United States be transferred to U.S. District Judge Robert Sweet in Manhattan. Facebook had requested the consolidation, while some investors sought to keep their cases in California.

Facebook said in a statement that it was pleased with the ruling, and that it would "vigorously" defend itself. An attorney for some of the California plaintiffs declined to comment, while a NASDAQ representative did not immediately respond to a request for comment.

Investors sued Facebook after its May 18 initial public offering, which was marred by technical glitches at the NASDAQ exchange and accusations that the company selectively disclosed unflattering information about its business prospects to privileged investors.

The lawsuits, which are seeking unspecified damages, could cost Facebook millions of dollars to defend as it strives to put the IPO behind it.

Facebook's stock tumbled as much as 50 percent after its debut at $38 per share. It closed at $21.95 on Thursday.

In at least 33 lawsuits seeking class action status, investors have asked courts to hold the company and its underwriters responsible for causing their losses.

Facebook has said that it did not violate any rules and that NASDAQ was to blame for trading glitches on the day of the offering.

Grouping cases together keeps similar lawsuits from proceeding at the same time in different courts.

The case is In Re: Facebook Inc, IPO Securities and Derivative Litigation, U.S. Judicial Panel on Multidistrict Litigation, No. 12-md-2389. (Reporting by Basil Katz in New York and Dan Levine in San Francisco)

FILED UNDER:
Photo

After wave of QE, onus shifts to leaders to boost economy

DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.

Barack Obama in India

Reuters Showcase

Climate Change

Climate Change

U.S.-China climate deal does not put pressure on India, says Modi  Full Article 

Bangladesh Politics

Bangladesh Politics

Bangladesh charges opposition chief with instigating attack on bus  Full Article 

Ukraine Crisis

Ukraine Crisis

Rebels press Ukraine offensive, Obama promises steps against Russian-backed "aggression"  Full Article 

Australian Open

Australian Open

Sweet revenge for Murray as old guard hold firm   Full Article 

Box Office

Box Office

Eastwood's "American Sniper" continues as U.S. box office juggernaut   Full Article 

Boko Haram Fight

Boko Haram Fight

Nigeria repels suspected Boko Haram attack on Maiduguri city  Full Article 

Movie Review

Movie Review

Dolly ki Doli is a breezy watch, writes Shilpa Jamkhandikar.  Full Article | Related Story 

Akshay Kumar's Latest

Akshay Kumar's Latest

"Baby" is a smartly written, well-acted film  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage