The holiday weekend commenced after an accumulation of shareholder lawsuits targeting Facebook’s bumpy IPO, with plaintiffs’ firms – including those with prominent Lawdragon 500 members – smelling blood, and many more of their ranks expected to follow in what Reuters called a “feeding frenzy.” As the Times DealB%k page noted, the IPO “was one of the highest profile stock offerings ever. Now, it may develop into the most litigated.”
Among the heavyweight firms involved is Robbins Geller Rudman & Dowd, which filed suit May 23. The firm had three partners on our 2011 Lawdragon 500 guide. Lieff Cabraser Heimann & Bernstein, with two members, also filed a lawsuit alleging that the IPO underwriters (Morgan Stanley, JP Morgan, and Goldman Sachs) revised their forecasts but only passed the new forecasts on “to certain major investors who were then able to sell their Facebook shares for a profit while the stock price rose immediately following the IPO.” Hagens Berman (with Lawdrgon 500 member Steve Berman) also entered the fray.
As the DealB%k post and other stories have noted, these allegations are based on a Reuters report on the downward forecasts and who was alerted. The National Law Journal also had a summary of the early suits and the firms involved. Regulators will also be taking a look at the offering.