a disappointing earnings announcement that wiped out about $120
billion of shareholder wealth, Facebook, its CEO and CFO, are
being sued by a shareholder potentially opening
the floodgates for sore-losing stock market gamblers the world
a result of Defendants’
wrongful acts and omissions, and
the precipitous decline in the market value of the Company’s
common shares, Plaintiff
and other Class members have suffered significant losses and
could have seen that coming?
complaint filed by shareholder
James Kacouris in Manhattan federal
court accused Facebook, Zuckerberg and Chief Financial Officer
David Wehner of making
misleading statements about or failing to disclose slowing
revenue growth, falling operating margins, and declines in
said the marketplace was
“shocked” when “the truth” began to emerge on Wednesday from
the Menlo Park, California-based company. He
said the 19 percent plunge in Facebook shares the next day
stemmed from federal securities law violations by the defendants.
Individual Defendants possessed the power and authority to
control the contents of Facebook's SEC filings, press releases,
and other market communications. The Individual Defendants were
provided with copies of the Company’s SEC filings and press
releases alleged herein to be misleading prior to or shortly
after their issuance and had the ability and opportunity to
prevent their issuance or to cause them to be corrected.
of their positions with the Company, and their access to
material information available to them but not to the public,
the Individual Defendants knew that the adverse facts
specified herein had not been disclosed to and were being
concealed from the public, and that the positive
representations being made were then materially false and
misleading. The Individual Defendants are liable for
the false statements and omissions pleaded herein."
Mr Kacouris would have preferred if Zuck had leaked the material
non-public information to him first so he could have unwound his
holdings in Facebook shares and avoided the losses from reality
suddenly biting on a stock that has grown to the proverbial skies.
Reuters notes, shareholders often
sue companies in the United States after unexpected stock price
declines, especially if the loss of wealth is large. The lawsuit
seeks class-action status and unspecified damages. A Facebook
spokeswoman declined to comment.