Facebook, Morgan Stanley and some of the biggest names in Silicon Valley are being pursued over the social network's disastrous share sale by the law firm that won a $7bn settlement for Enron's shareholders. Robbins Geller is co-ordinating a class action lawsuit alleging that Facebook and its bankers misled investors about the true state of their business while informing a handful of privileged clients about the company's true prospects.
The lawsuit, filed in New York, names Mark Zuckerberg, Facebook's founder, as a defendant, as well as top Silicon Valley investors Peter Thiel and Marc Andreessen, and Goldman Sachs, JP Morgan and Barclays Capital. It comes as US regulators announced they are investigating the handling of Facebook's initial public offering (IPO). More shareholder lawsuits are expected.
In its suit, Robbins Geller alleges that Facebook bankers cut their forecasts for the company's revenue growth during the middle of their IPO roadshow – when bankers and Facebook executives including founder Mark Zuckerberg met analysts and potential investors.
Reuters reported this week that in the run-up to the IPO Morgan Stanley told some major clients that consumer internet analyst Scott Devitt had cut his revenue forecasts for the Facebook.
