Pennsylvania-based law firm Kessler Topaz Meltzer & Check, LLP on Friday filed a class action lawsuit against Facebook regarding the handling of its initial public offering, which was made on March 18th. On the day of its IPO, the company was hit with a privacy-related class action lawsuit seeking $15 billion in damages. This new complaint, which was filed in the United States District Court for the Southern District of New York, charges Facebook and multiple officers, directors and underwriters with violating the Securities Act of 1933 by failing to disclose or disregarding material adverse facts that were known to them.
“The Complaint asserts that defendants failed to disclose at the time of the IPO that Facebook was then experiencing a severe and pronounced reduction in revenue growth due to an increase in users of its Facebook mobile applications (“apps”) or website through mobile devices rather than through personal computers,” the firm said in a release.
The firm continued, “Additionally, defendants failed to disclose during the roadshow conducted in connection with the IPO, certain Underwriter Defendants reduced their second quarter and full year 2012 performance estimates for Facebook, which revisions were material information which was not shared with all Facebook investors, but rather, was selectively disclosed by defendants to certain preferred investors and omitted from the Offering Materials.”
Investors who purchased Facebook stock can join the class on the firm’s website if they wish to participate in the suit, which is still seeking a lead plaintiff.