Facebook must face lawsuit over IPO issues

Wednesday 18 December 2013 16.47
Facebook's 2012 listing on the Nasdaq was beset with problems
Facebook's 2012 listing on the Nasdaq was beset with problems

A US judge has said Facebook, CEO Mark Zuckerberg and dozens of banks must face a lawsuit accusing the company of misleading investors about its financial condition before its $16 billion initial public offering.

In a decision made public today, US District Judge Robert Sweet said investors could pursue claims that Facebook omitted material information from its registration statement.

The investors had alleged, among other things, that Facebook should have disclosed internal projections on how increased mobile usage and product decisions might reduce future revenue.

On Monday, Sweet ruled that investors could also pursue claims accusing Nasdaq OMX Group Inc of concealing technology problems that resulted in difficulties in processing trades on Facebook's first day of trading.