* Defendants say pre-IPO disclosures sufficient
* Facebook shares remain below IPO price
May 1 Facebook Inc, its Chief Executive
Mark Zuckerberg and dozens of banks asked a federal judge to
throw out a lawsuit accusing the social media company of
misleading investors about its financial condition before its
$16 billion initial public offering a year ago.
The defendants said in court papers on Wednesday that before
the IPO last May 18, Facebook had no obligation to publicly
disclose internal projections on how increased mobile usage and
product decisions might affect future revenue, even if it had
provided the projections to its underwriters' analysts.
They said the U.S. Securities and Exchange Commission has
"consistently" refused to require such broad disclosure because
of its potential impact on a company's ability to raise money.
"Plaintiffs would have this court impose - retroactively - a
rule which the SEC has for decades thoughtfully rejected," the
defendants said in papers filed in U.S. District Court in
Manhattan. "This court should decline the invitation."
Among the defendants is Morgan Stanley, the lead
underwriter of the IPO.
Max Berger, a partner at Bernstein Litowitz Berger &
Grossmann representing pension fund and other investors that are
collectively the lead plaintiffs, did not immediately respond to
requests for comment.
The case before U.S. District Judge Robert Sweet
consolidates 31 lawsuits over Facebook's IPO.
Sweet also oversees separate investor litigation against
Nasdaq OMX Group Inc over allegations that orders to
buy and sell Facebook shares were executed improperly on the
first day of trading.
Facebook, based in Menlo Park, California, went public at
$38 per share. Its share price rose as high as $45 on the first
day, but quickly fell and remain below their offering price.
Shares of Facebook closed Tuesday at $27.77 on the Nasdaq.
Facebook is scheduled to report quarterly results after U.S.
markets close on Wednesday.
The case is In re Facebook Inc IPO Securities and Derivative
Litigation, U.S. District Court, Southern District of New York,