Feeds

Widow lost savings in Facebook stock, sues all concerned for $1.9m

It says 'bumwad from Bank of Toyland' right on it

High performance access to file storage

Global financial services firm Morgan Stanley is trying to get its name removed from the securities case of a New Jersey widow who lost her life savings in the Facebook IPOcalypse.

Uma Swaminathan filed an arbitration complaint with the Financial Industry Regulatory Authority (FINRA) looking for $1.9m compensation for the trading debacle. She named Morgan Stanley, Vanguard Financial Group, the NASDAQ exchange and its parent NASDAQ OMX and Facebook in her complaint, Reuters reported.

Swaminathan claims that Morgan Stanley, as the lead underwriter for the IPO, withheld the information that it was downgrading its outlook on Facebook. But the financial firm says she's not one of its customers, and that since she bought the shares through Vanguard, the arbitration has nothing to do with Morgan. The firm filed with a New York court to get its name off the case.

Neither Facebook nor NASDAQ are licensed by the financial authorities, so they are not required to take part in the arbitration. If Morgan Stanley gets out of the case, it could signal to investors that FINRA can't help them with Facebook-related complaints.

Facebook's debut in May was fraught with technical glitches, leaving investors unsure how much stock they'd bought and sold and at what price.

Swaminathan also blames her own brokerage as she claims that Vanguard didn't cancel her order for shares when she asked it to. In Morgan Stanley's case, Swaminathan said the firm informed only its own "privileged clients" that it wasn't as sure about Facebook as it had been, then issued more shares and raised the price to "suck more suckers into the stock".

She said she was "trapped" in the stock until Monday morning, when it had fallen to around $8 or $9 a share. She claims $1.9m, including $105,000 in compensatory damages, $500,000 punitive damages, $1m for "pain and suffering" and $315,000 in treble damages, awarded in instances of fraud. ®

Combat fraud and increase customer satisfaction

More from The Register

next story
Putin tells Snowden: Russia conducts no US-style mass surveillance
Gov't is too broke for that, Russian prez says
One year on: diplomatic fail as Chinese APT gangs get back to work
Mandiant says past 12 months shows Beijing won't call off its hackers
Record labels sue Pandora over vintage song royalties
Companies want payout on recordings made before 1972
Lavabit loses contempt of court appeal over protecting Snowden, customers
Judges rule complaints about government power are too little, too late
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
Don't let no-hire pact suit witnesses call Steve Jobs a bullyboy, plead Apple and Google
'Irrelevant' character evidence should be excluded – lawyers
Edward Snowden on his Putin TV appearance: 'Why all the criticism?'
Denies Q&A cameo was meant to slam US, big-up Russia
Judge halts spread of zombie Nortel patents to Texas in Google trial
Epic Rockstar patent war to be waged in California
EFF: Feds plan to put 52 MILLION FACES into recognition database
System would identify faces as part of biometrics collection
Ex-Tony Blair adviser is new top boss at UK spy-hive GCHQ
Robert Hannigan to replace Sir Iain Lobban in the autumn
prev story

Whitepapers

SANS - Survey on application security programs
In this whitepaper learn about the state of application security programs and practices of 488 surveyed respondents, and discover how mature and effective these programs are.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Top three mobile application threats
Learn about three of the top mobile application security threats facing businesses today and recommendations on how to mitigate the risk.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.