Facebook Finally Gets This Break
Facebook’s (NASDAQ:FB) initial public offering has received plenty of criticism, but it looks like the social network will not have to fight any more legal battles related to it, at least for now.
United States District Judge Robert Sweet in Manhattan threw out four class-action lawsuits on Wednesday that were filed against chief executive Mark Zuckerberg and other Facebook executives. The judge concluded that the individual shareholders who brought the cases could not “establish standing to sue” because they had not yet invested in the company at the time the alleged wrongdoing took place, Reuters said.
These cases in particular — consolidated by Sweet from more than 53 different lawsuits — highlighted the problems that tarnished one of the most highly anticipated stock market debuts in recent times, a memory that Facebook would rather not have resurrected.
But more importantly, Sweet’s dismissal was based on a technicality, leaving room for other cases to make the same accusations. And there are other lawsuits waiting in the wings, filed by various plaintiffs over Facebook’s $16-billion IPO last May. If any of the other claimants were actually shareholders at the time the company went public, the next round of legal wrangling may proceed differently…