Facebook (FB) IPO Facing Numerous Lawsuits

There was no question lawsuits would start flying as the disastrous story of the IPO of Facebook (NASDAQ: FB) unfolded, with three lawsuits already filed in regard to the company going public, with one of them being against Nasdaq OMX Group, which delayed the IPO because of technical issues, and also had difficulty sending executions confirmations to let traders know they had been successfully completed.

Another lawsuit was filed against Facebook, Facebook officers, and the underwriters of the IPO.

From the complaint:

The true facts at the time of the IPO were that Facebook was then experiencing a severe and pronounced reduction in revenue growth due to an increase of users of its Facebook app or website through mobile devices rather than a traditional PC such that the Company told the Underwriter Defendants to materially lower their revenue forecasts for 2012. And, defendants failed to disclose that during the roadshow conducted in connection with the IPO, certain of the 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 Registration Statement and/or Prospectus.

Among the defendants named in the lawsuit include Facebook executives Mark Zuckerberg, CFO David Ebersman and Chief Accounting Officer David Spillane; board members of the company Marc Andreessen, Peter Thiel, Erskine Bowles, Donald Graham, Jim Breyer and Reed Hastings; and underwriters Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS), JPMorgan Chase (NYSE:JPM), Merrill Lynch (BAC) and Barclays Capital.

It centers around the lowering of revenue forecasts by Morgan Stanley consumer Internet analyst, Scott Devitt, which was unusual because it was done at a late hour of the offering, while in the midst of Facebook's roadshow leading up to the IPO.

Questions on whether retail customers received the news in a timely manner is a major question generated by the suit.

Facebook was trading at $31.83, gaining $0.83, or 2.68 percent, as of 11:21 AM EDT.