Facebook Inc and banks involved in the company’s IPO were sued by the social networking leader’s shareholders, who claimed the defendants hid Facebook’s weakened growth forecasts ahead of its USD16-billion initial public offering.
The defendants, who also include Facebook CEO Mark Zuckerberg, were accused of concealing from investors during the IPO marketing process "a severe and pronounced reduction" in revenue growth forecasts, resulting from increased use of its app or website through mobile devices. Facebook went public last week.
Morgan Stanley, Goldman Sachs Group Inc and JPMorgan Chase & Co are being sued along with other underwriters. Also sued were units of Bank of America Corp and Barclays Plc and Facebook’s top executives and directors, according to the filing.
(Source: Business Standard )