Another IPO-Related Lawsuit Filed Vs. Facebook

Facebook’s recent string of court victories will be tested by yet another lawsuit related to its bungled May 18 initial public offering, this one filed by shareholder Gaye Jones.

Reuters reported that Jones’ lawsuit alleged that Facebook’s directors knew that the company did not disclose weaker revenue trends related to expanding mobile use of the social network, adding that such information was selective shared only with underwriters and key investors.

According to Reuters, the suit by Jones stated:

The defendants were unjustly enriched because they realized enormous profits and financial benefits from the IPO, despite knowing that reduced revenue and earnings forecasts for the company had not been publicly disclosed to investors.

Reuters reported that the lawsuit filed by Jones is a derivative case, much like the four that were dismissed in February, and that any damages recovered would go to Facebook, and not to shareholders, but the difference in this case is that Jones owned Facebook shares prior to the IPO, having acquired them last February.

Readers: Will Jones’ lawsuit succeed where others failed?

Image courtesy of Shutterstock.

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