Defense Strategy Of Facebook, Underwriters: Consolidate Lawsuits, Blame Nasdaq

Facebook will reportedly file a motion, as early as Friday, to consolidate all of the lawsuits against the company related to its troubled initial public offering, and the motion is expected to include lead underwriters Morgan Stanley, Goldman Sachs, and J.P. Morgan.

The New York TimesDealBook reported that Nasdaq will be a major part of the filing, with Facebook and the underwriters pointing to the technical issues experienced by the exchange on the day the IPO launched.

According to DealBook, more than 30 cases have been filed against Facebook and its underwriters, mostly in New York and California.

Most of the suits are based on allegations that Facebook and the underwriters withheld negative information about the social network’s revenue growth from the general public, sharing it only with preferred investors.

After opening at $38 per share, Facebook shares have been trading at around $28 to $29, closing Thursday at $28.29 per share.

Readers: Now that it’s apparently Nasdaq’s turn to play defense, how will the exchange react to the possible move by Facebook and its underwriters?

Image courtesy of Shutterstock.

Related Stories
Mediabistro Course


PodcastingLearn to develop, create, and launch your own podcast! On October 23, Steve Belaner, the host of the weekly podcast The Gamut, will teach you how to determine the goals of your podcast, perfect your concept, contact and book guests, market your podcast, and get your show up and running in just a few weeks. Register now!