Facebook Inc. (NASDAQ: FB) will not have to face scores of suits over flaws with its initial public offering. A court has ruled that all of these cases should be put together, which should help the social network make a single defense and save on legal fees.
Facebook's shares have traded consistently below their $38 IPO prices. Wild and uncontrolled trading the first day the stock was available caused some investors considerable losses. And there is an open question about whether the company mislead investors about its prospects. According to The Droid Guy:
Facebook's wishes to defend itself against one consolidated case has been granted. The social networking behemoth will now face a legal battle in Manhattan, New York against dozens of lawsuits over its failed initial public offering.
There are estimated 50 lawsuits filed against the social network, Nasdaq exchange, and Facebook's underwriters. A panel of federal judges have decided that all of these cases will be collected throughout the United States as one and transferred to a district court in Manhattan headed by Judge Robert Sweet.
Douglas A. McIntyre
Filed under: 24/7 Wall St. Wire, Internet, Law, Media Tagged: FB