Dozens of lawsuits against Facebook Inc, the NASDAQ exchange and various
underwriters will be consolidated before a federal judge in New York,
who must sort through the legal aftermath of Facebook's botched initial
A panel of federal judges on Thursday ordered that
cases filed around the United States be transferred to U.S. District
Judge Robert Sweet in Manhattan. Facebook had requested the
consolidation, while some investors sought to keep their cases in
Facebook said in a statement that it was pleased with
the ruling, and that it would "vigorously" defend itself. An attorney
for some of the California plaintiffs declined to comment, while a
NASDAQ representative did not immediately respond to a request for
Investors sued Facebook after its May 18 initial public
offering, which was marred by technical glitches at the NASDAQ exchange
and accusations that the company selectively disclosed unflattering
information about its business prospects to privileged investors.
lawsuits, which are seeking unspecified damages, could cost Facebook
millions of dollars to defend as it strives to put the IPO behind it.
Facebook's stock tumbled as much as 50 percent after its debut at $38 per share. It closed at $21.95 on Thursday.
at least 33 lawsuits seeking class action status, investors have asked
courts to hold the company and its underwriters responsible for causing
Facebook has said that it did not violate any rules
and that NASDAQ was to blame for trading glitches on the day of the
Grouping cases together keeps similar lawsuits from proceeding at the same time in different courts.
case is In Re: Facebook Inc, IPO Securities and Derivative Litigation,
U.S. Judicial Panel on Multidistrict Litigation, No. 12-md-2389.
Copyright Thomson Reuters 2012