Investors begin legal action against Facebook
25th May 2012
The social networking giant Facebook and its founder, Mark Zuckerberg, are being sued by a group of investors who claim the company concealed important information concerning its recent flotation on the stock market.
A partner from a leading US firm, who has one of the most high-profile investment fraud lawyer jobs in the country, has been instructed to represent the claimants after Facebook’s shares tumbled following an initially strong debut.
Some of the people involved have reported losing up to a fifth of their overall wealth after purchasing their first batch of shares, which were originally valued at $38 each.
Facebook officials have strongly denied accusations that they and their banks, including Morgan Stanley, persuaded investors to pay too much for shares which they knew would weaken significantly before long.
Zuckerberg’s website is now worth $85bn - much lower than its estimated value of $104bn when it was first listed.