Below is the first part of an article by Bob Van Voris from bloomberg.com. It reads…
Facebook Inc. and the underwriters of its May 2012 initial public offering must face a class-action lawsuit by investors claiming the company misled them about its financial condition, a judge ruled.
U.S. District Judge Robert Sweet in Manhattan rejected arguments by Facebook and banks including Goldman Sachs Group Inc. that investors were adequately warned about the effect increased use of mobile devices might have on revenue. The ruling came in an opinion dated Dec. 11 that was filed publicly yesterday.
The investors, led by a group of public pension funds and an investment fund, claim the defendants, including Facebook co-founder and Chief Executive Officer Mark Zuckerberg and other company executives, overstated the prospects for earnings and growth in the mobile market before the May 2012 IPO.
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