Investors sue Nasdaq,Facebook on IPO
Nasdaq CEO says mistakes were made in Facebook listing; hares down more than 18.
After the spike,the humongous fall. Nasdaq OMX Group Inc has been sued by an investor who claimed the exchange operator was negligent in handling orders for Facebook Inc shares following its initial public offering IPO,causing losses for investors.
In addition,a different civil lawsuit was filed against Facebook,Mark Zuckerberg,IPO underwriters Morgan Stanley amp; Co and others alleging violations of securities laws.
Phillip Goldberg,a Maryland resident,is seeking class-action status on behalf of all investors who lost money because Nasdaq delayed or otherwise mishandled their buy,sell or cancellation orders for Facebook stock on May 18,the day the social networking company went public.
A technical glitch delayed Facebook’s market debut by roughly half an hour,and later delayed order confirmations.
Nasdaq Chief Executive Robert Greifeld told investors at his company’s annual meeting on Tuesday that clearly we had mistakes in the Facebook listing,but more than 570 million shares were processed on the first day.
Goldberg filed his lawsuit on Tuesday in the U.S. District Court in Manhattan.
SHARES SLIDE
Separately,investor Darryl Lazar filed a proposed class-action lawsuit in a California state court,alleging that Facebook’s registration and prospectus were materially false,according to a statement from plaintiff law firm Glancy Binkow amp; Goldberg.
It was reported late on Monday that the consumer Internet analyst at lead underwriter Morgan Stanley cut his revenue forecasts for Facebook in the days before the offering,information that may not have reached many investors before the stock was listed.
Representatives from Facebook and Morgan Stanley could not immediately be reached for comment on the securities class-action.
Facebook shares sank on Monday and Tuesday — their second and third days of trading — to end at 31,more than 18 percent below the initial public offering price of 38.
The Nasdaq case is Goldberg v. Nasdaq OMX Group Inc et al,U.S. District Court,Southern District of New York,No. 12-04054.
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