Hagens Berman: 42 Days Remain Before July 23, 2012, Deadline In Securities Case Against Facebook
Hagens Berman Sobol Shapiro, an investor-rights law firm, today reminded
investors that only 42 days remain before the July 23, 2012, lead
plaintiff deadline in a securities class action filed against Facebook
Hagens Berman Sobol Shapiro, an investor-rights law firm, today reminded investors that only 42 days remain before the July 23, 2012, lead plaintiff deadline in a securities class action filed against Facebook (NASDAQ: FB), Zuckerberg and Underwriters. The lawsuit, filed May 24, 2012, 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, 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. The complaint can be accessed here. Over the next 42 days, investors who purchased or otherwise acquired shares of Facebook common stock between May 18, 2012, and May 22, 2012 (the “Class Period”), and who have suffered substantial financial losses are encouraged to contact Hagens Berman Partner Reed Kathrein by calling (510) 725-3000. Investors may also contact the firm via email at FB@hbsslaw.com or by visiting http://hb-securities.com/investigations/Facebook. 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. Specifically, the complaint alleges that Facebook privately pre-announced that its second quarter would fall short of analysts' estimates. Facebook allegedly 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 million 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.