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Shareholders Sue: Morgan Stanley, Zuckerberg, Facebook

Claim revised revenue forecasts were hidden from bulk of investors
By Kate Seamons,  Newser Staff
Posted May 23, 2012 8:37 AM CDT
Shareholders Sue: Morgan Stanley, Zuckerberg, Facebook
Mark Zuckerberg, center, rings the Nasdaq opening bell from Facebook headquarters in Menlo Park, Calif.   (AP Photo/Nasdaq via Facebook, Zef Nikolla, File)

(Newser) – Good thing Mark Zuckerberg has that new bride to be excited about, because his new billions are only bringing him headaches. Shareholders today filed a suit against Zuckerberg, Facebook itself, and a number of Morgan Stanley-led banks, arguing that all three kept secret a "a severe and pronounced reduction" in the site's revenue growth forecasts during the IPO process, reports Reuters. Business Insider adds that shareholders are being represented by Robbins Geller, the firm that won $7 billion from Enron.

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The reduction is tied to an increase in tough-to-monetize mobile users; because that wasn't mentioned in Facebook's prospectus, the suit alleges that the prospectus "contained untrue statements of material facts." Nasdaq is also the target of a separate Facebook-related suit. (Read more Facebook stories.)

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