If you had a big stake in the Facebook IPO, you've got plenty of reasons to be a little upset about how things have been going since then. A new class action lawsuit takes things a step further by suing Mark Zuckerberg, claiming that the Facebook founder used insider knowledge to unload on $1 billion worth of massively overvalued stock.
The lawsuit says that Zuckerberg and Facebook's management knew that the site couldn't draw in enough advertising revenues to support the stock's $38 IPO share price, and that Morgan Stanley, JPMorgan, and Goldman Sachs all warned them about it.
Rather than doing the upstanding thing and taking action, Zuckerberg decided to dump a large portion of shares while the prices were still good. Only a select few 'major' investors were actually informed about the overvaluation.
Still, it could be worse - Zuckerberg hasn't faced any criminal charges so far, so he doesn't have to worry about any of the stiff penalties involved with insider trading. Yet.
Source: TMZ
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