By Nate Raymond
NEW YORK, Feb 13 (Reuters) - Facebook Inc Chief Executive
Mark Zuckerberg and other executives won the dismissal Wednesday
of four shareholder lawsuits following the social networking
company's $16 billion initial public offering last year.
U.S. District Judge Robert Sweet in Manhattan concluded that
the individual investors who brought the cases could not
establish standing to sue because they were not Facebook
shareholders at the time the alleged wrongdoing took place.
Facebook still faces many other claims from various
plaintiffs over its IPO last May. The cases largely center on
allegations that Facebook executives failed to make adequate
disclosures ahead of the IPO about weakened revenue growth
projections resulting from greater use of the company's website
through mobile devices.
Fifty-three lawsuits have been consolidated before Sweet
stemming from the IPO. The lawsuits are a continuing headache
for Facebook and a reminder of the glitches that tarnished one
of the most hotly anticipated new stock offerings in recent
While dismissing the four cases Wednesday, the judge gave
the plaintiffs the option to revise the lawsuits and refile
But in a finding that could be significant for other
Facebook lawsuits, the judge said that while the plaintiffs
claimed the defendants knew they hid facts from the marketplace,
the company had "repeatedly made express and extensive warnings"
about the increased use of mobile applications.
Facebook spokesman Andrew Noyes said the company was pleased
with the ruling. Lawyers for the plaintiffs had no immediate
Sweet said the plaintiffs could file new versions of the
cases against Facebook officers and directors within 20 days.
The cases are classified as so-called "derivative" cases --
filed by investors on behalf of the corporation -- rather than
proposed class actions against the company on behalf of a group
Separately, Sweet ruled that a proposed class action against
NASDAQ OMX Group Inc over the IPO should stay in his court. The
plaintiff had wanted the case to be returned to the New York
State Supreme Court, where it was initially filed.
Nasdaq has been accused in various investor lawsuits of not
properly executing orders to buy and sell Facebook shares on the
first day of trading. A lawyer for the plaintiff and a Nasdaq
spokesman were not immediately available for comment.
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.
For plaintiff Edward Childs: Gregory Linkh and Michael
Goldberg, Glancy Binkow & Goldberg; Brian Murray, Murray Frank;
and Mark Rosen and Stephen Basser, Barrak, Rodos & Bacine.
For plaintiff Lidia Levy: Joseph Guglielmo and Deborah
Clark-Weintraub, Scott + Scott; and Scott Egleston, Law Offices
of Scott D. Egleston.
For plaintiff William Cole and Hal Hubuschman: Shane
Sanders, Brian Robbins, Felipe Arroyo and Gina Stassi, Robbins
For the Facebook defendants: Andrew Clubok, Brant Warren
Bishop, Elizabeth Deeley, James Basile, Susan Engel, Kirkland &
Ellis; and Richard Bernstein, Tariq Mundiya, Todd Cosenza,
Elizabeth Bower, Willkie Farr & Gallagher.
For plaintiff Michael Zack: Gary Graifman, Kantrowitz
Goldhamer & Graifman; Howard Longman, Stull, Stull & Brody; and
Lynda Grant, The Grant Law Firm.
For NASDAQ: William Slaughter, Margaret Osborne Padilla,
Paul Lantieri, Stephen Kastenberg, Ballard Spahr.
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