A federal appeals court on Friday said Facebook Inc officials including chief executive Mark Zuckerberg cannot be sued by shareholders who said the social media company concealed threats to its growth prospects before its May 2012 initial public offering (IPO).
The 2nd US Circuit Court of Appeals said investors who lost money on shares they bought after the US$16bil (RM61.1bil) IPO lacked standing to sue Facebook directors and underwriters led by Morgan Stanley, over alleged inadequate disclosures made before the company went public.
Shareholders said Facebook should have publicly revealed its internal projections on how increased mobile usage might reduce future revenue, rather than quietly warn its underwriters, which then cut their earnings forecasts.
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The 2nd US Circuit Court of Appeals said investors who lost money on shares they bought after the US$16bil (RM61.1bil) IPO lacked standing to sue Facebook directors and underwriters led by Morgan Stanley, over alleged inadequate disclosures made before the company went public.
Shareholders said Facebook should have publicly revealed its internal projections on how increased mobile usage might reduce future revenue, rather than quietly warn its underwriters, which then cut their earnings forecasts.
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