NEW YORK, May 29, 2012 /PRNewswire/ – The law firm of Harwood Feffer LLP announces that it filed a class action lawsuit on May 25, 2012 (Case No. 12-cv-4215) on behalf of purchasers of the common stock of Facebook Inc.
The lawsuit alleges that the three underwriters knew that the market for the Company’s shares was weaker than the public believed by virtue of their having advised certain of their major clients to reduce their requests for allocations of the Company’s shares due to certain weaknesses of the Company’s prospects of which they were aware. Notwithstanding this material non-public information about market interest, the lead underwriters (a) increased to the highest end of the proposed range the Company’s share price and (b) increased by 25% the number of shares sold in the offering. By selling short into the market their 15% over-allotment while in possession of such material, non-public information, the lead underwriters violated Section 20A of the Securities Exchange Act of 1934.