Facebook IPOcalypse cases: One lawsuit to end them All
Plucky Zucky aims to dump them into NY legal Mount Doom
The 57 different cases against Facebook or the NASDAQ over the free-content ad firm's disastrous IPO have all been mashed up into one uber-lawsuit to be heard in New York.
The technical glitches that marred the first day of Facebook's stock trading have been blamed by many for the share's low prices, sparking class action suits against the stock exchange, Facebook, Mark Zuckerberg and anyone else at the two firms that could be added to the list.
Investors have also alleged that Facebook only told a preferred few about the fact that its underwriters' analysts were concerned about the pace of ad growth.
Brokers and financial institutions also lost a lot of money on the day, as they couldn't see whether their trades had gone through and sometimes they went through later than ordered. The computer cock-up meant that the traders put through the same orders twice, ending up with more or less of the stock than they wanted, or the canny trade they made one minute turned into a stupid one by the time the order actually went through. The lawsuits accuse the NASDAQ of failing to execute the trades during the IPO.
A panel of judges accepted Facebook's request that the dozens of suits filed around the country get mixed up into one court case to be heard by US district judge Robert Sweet in Manhattan. Some of the folks who filed in California were trying to get their suits to stay in that state.
"We conclude that though the NASDAQ actions involve different defendants and claims from those in the securities and derivative actions, they do involve enough common questions of fact, related circumstances and common discovery to warrant centralisation," the judges said.
The lawsuits could cost Facebook millions of dollars if any or all of them result in damages, which the social network can ill-afford at a time when its stock price has tumbled 50 per cent from its debut and investors are still uncertain if the firm can make money from mobile users. ®