Facebook Moves to Consolidate More Than 30 IPO Lawsuits
Facebook has petitioned the U.S. courts to consolidate more than 30 lawsuits filed in connection with its ill-handled initial public offering.
The company argued in a court brief that the lawsuits filed against Facebook, some of its directors, the underwriters for its IPO and the Nasdaq stock market should be heard together in the federal court in the Southern New York district.
The cases rely on a "common nucleus of facts concerning the IPO and the decline in the price of Facebook shares," the company said in its brief, filed Thursday. Consolidating the cases will avoid duplication of discovery and possible inconsistent rulings, its lawyers wrote.
The lawsuits fall broadly into two categories. Those against Facebook and its underwriters allege Facebook shared information about the health of its business with analysts at the underwriters, including Morgan Stanley, who then shared the information verbally with large institutional investors, without disclosing it to the wider investing public.
That put smaller investors at a disadvantage and was a violation of federal securities laws, the lawsuits allege.