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New Facebook Lawsuit from Shareholder Over IPO

By Alex Johnston
Epoch Times Staff
Created: March 4, 2013 Last Updated: March 4, 2013
Related articles: United States » National News
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New Facebook lawsuit: A new lawsuit was filed against Facebook over its IPO on Monday. 

This Feb. 25, 2013 photo taken in Washington, DC, shows the splash page for the Internet social media giant Facebook. (Karen Bleier/AFP/Getty Images)

This Feb. 25, 2013 photo taken in Washington, DC, shows the splash page for the Internet social media giant Facebook. (Karen Bleier/AFP/Getty Images)

A shareholder served Facebook with a lawsuit over its initial public offering (IPO) on Monday, it was reported.

The suit, filed by Gaye Jones, is aiming to hold its founder and Chief Executive Mark Zuckerberg, and other high-level management accountable for the damage, reported Reuters. The suit claimed Facebook did not disclose smaller revenue trends when users went on the site via mobile devices and that information was “selectively shared” to key investors, said Reuters.

“The defendants were unjustly enriched because they realized enormous profits and financial benefits from the IPO, despite knowing that reduced revenue and earnings forecasts for the company had not been publicly disclosed to investors,” complaint said.

[Related: Facebook Suffers ‘Sophisticated Attack,’ But Data Not Compromised]

Facebook’s initial shares fell from around $38 to around $25 in a month after it was introduced in May. On Monday, Facebook stock closed at $27.72 on Nasdaq.

More than 50 investor IPO lawsuits have been filed against the Palo Alto, Calif.-based company since May. However, Jones has owned Facebook stock since Facebook 2012, which Reuters pointed out is unlike the other plaintiffs.

The suit comes just under a month after the social media giant was sued by the family of a deceased Dutch programmer, who alleged that Facebook stole the patented “like” and “share” functions from him.

“Years before Facebook and AddThis, Jos van der Meer conceived of and patented core aspects of social media,” said Dr. Paul Schneck, the head of Rembrandt Social Media LP, which holds the patent.

The company is “using the ideas disclosed in Jos’ patents without permission or payment,” Schneck added. “Through this litigation, Rembrandt Social Media hopes to recover payment for the unauthorized usage of patents by Facebook,” he said.

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