| NEW YORK
NEW YORK Dec 6 A group of investors including
state pension funds in North Carolina and Arkansas will be the
lead plaintiffs in securities lawsuits arising out of Facebook
Inc's $16 billion initial public offering, a U.S. judge
ruled on Thursday.
The investors, in a proposed class-action case, have accused
Facebook of misrepresenting its financial condition in the
run-up to the May stock offering. They are represented by law
firms Bernstein Litowitz Berger & Grossmann and Labaton
The ruling helps set a structure for the Facebook IPO
litigation, a headache for the social media company and a
nagging reminder of the technical glitches in the highly
anticipated stock market debut.
U.S. District Judge Robert Sweet in Manhattan also named
lead plaintiffs for lawsuits against NASDAQ OMX Group Inc
stemming from the IPO. NASDAQ was sued over allegations
that orders to buy and sell Facebook were not properly executed
on the first day of trading.
Facebook, which has defended its pre-IPO disclosures,
declined to comment on Thursday. A spokesman for NASDAQ declined
to comment on the litigation.
Facebook shares made their debut at $38 per share, and later
fell as much as 50 percent. On Thursday, they closed at $26.90,
down 2.6 percent.
Sweet consolidated the cases and picked lead plaintiffs to
head up most of the 42 lawsuits before him arising out of the
Under a federal law governing securities lawsuits, courts
routinely select a lead plaintiff in class actions. The lead
plaintiff typically is the shareholder with the biggest losses,
though judges have discretion to pick a different investor.
The plaintiff group picked to lead 31 cases alleging
securities violations against Facebook includes the North
Carolina Retirement Systems, Arkansas Teacher Retirement System,
the Fresno County Employees' Retirement Association and Banyan
Capital Master Fund Ltd.
The group has collectively claimed a combined $7.1 million
"Its members are large, institutional investors with
experience representing shareholder classes in similar
litigation with the resources to pursue the action," Sweet said.
In the securities lawsuits against NASDAQ, the judge said
First New York Securities LLC, T3 Trading Group LLC, and Avatar
Securities LLC would act as co-lead plaintiffs. The group traded
a combined $316 million in Facebook shares the day of the IPO,
the decision said.
The case is In re Facebook, Inc, IPO Securities and
Derivative Litigation, U.S. District Court, Southern District of
New York, MDL No. 12-2389.