New investor IPO lawsuit filed against Facebook

New investor IPO lawsuit filed against Facebook

Facebook has been hit with yet another IPO-related suit holding chief executive Mark Zuckerberg and the social media giant’s underwriters responsible for the fallout from its clumsy initial public offering.

The new lawsuit was filed by early Facebook shareholder Gaye Jones, who claims that Zuckerberg and rest of the company’s top-level management knew about Facebook’s poor revenue trends ahead of the IPO but chose not to disclose that information to all investors.

The lawsuit calls for the judiciary’s intervention in making the defendants give up the profits they earned by selling stocks through the IPO with the knowledge that shares were significantly overpriced.

“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,” the complaint read, according to Reuters.

This is not the first time Facebook was dragged to the court over a botched IPO. Since May last year, the company has seen several dozen investor IPO lawsuits filed against it. 

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