Monday, June 04, 2012

New Facebook Lawsuit Accuses Zuckerberg Of Insider Trading

A new class action lawsuit has been filed in the Facebook IPO fiasco, this time taking things a step further than the previous lawsuits by directly suing Mark Zuckerberg, claiming that the Facebook founder used insider knowledge to unload more than a $1 billion worth of massively overvalued stock.

According to the reports by, the lawsuit alleges that Zuckerberg and Facebook's management knew that the site couldn't draw in enough advertising revenues to support the stock's $38 IPO share price, and that Morgan Stanley, JPMorgan, and Goldman Sachs all warned them about it. Using that inside information, it is alleged that Zuckerberg moved to quickly unload shares, in a dirty billion-dollar move.

FB closed at $27.72 a share and was down 27 percent since going public this past Friday and hit record lows again today before rebounding slightly. The stock price has fallen in all but three sessions since shares began trading, and it reached a new intraday low at $26.44, 30.4 percent lower than the IPO price.

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