Facebook, Zuck Sued By "Shocked" Shareholders As "The Truth" Emerges

Following a disappointing earnings announcement that wiped out about $120 billion of shareholder wealth, Facebook, its CEO and CFO, are being sued by a shareholder potentially opening the floodgates for sore-losing stock market gamblers the world over.

"As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s common shares, Plaintiff and other Class members have suffered significant losses and damages"

Who could have seen that coming?

The complaint filed by shareholder James Kacouris in Manhattan federal court accused Facebook, Zuckerberg and Chief Financial Officer David Wehner of making misleading statements about or failing to disclose slowing revenue growth, falling operating margins, and declines in active users.

Kacouris said the marketplace was “shocked” when “the truth” began to emerge on Wednesday from the Menlo Park, California-based company. He said the 19 percent plunge in Facebook shares the next day stemmed from federal securities law violations by the defendants.

"The Individual Defendants possessed the power and authority to control the contents of Facebook's SEC filings, press releases, and other market communications. The Individual Defendants were provided with copies of the Company’s SEC filings and press releases alleged herein to be misleading prior to or shortly after their issuance and had the ability and opportunity to prevent their issuance or to cause them to be corrected.

Because of their positions with the Company, and their access to material information available to them but not to the public, the Individual Defendants knew that the adverse facts specified herein had not been disclosed to and were being concealed from the public, and that the positive representations being made were then materially false and misleading. The Individual Defendants are liable for the false statements and omissions pleaded herein."

Presumably Mr Kacouris would have preferred if Zuck had leaked the material non-public information to him first so he could have unwound his holdings in Facebook shares and avoided the losses from reality suddenly biting on a stock that has grown to the proverbial skies.

As Reuters notes, shareholders often sue companies in the United States after unexpected stock price declines, especially if the loss of wealth is large. The lawsuit seeks class-action status and unspecified damages. A Facebook spokeswoman declined to comment.

Full Docket below...

Comments

Dutti Cognitive Dissonance Sun, 07/29/2018 - 22:31 Permalink

These kinds of lawsuits are commonplace.

They are mostly BS, because usually a lot of non-productive costs are incurred.

Every shareholder gets a big stack of papers, lots of office drones need to get paid, and company funds are used to pay for the expensive defense lawyers etc.

If successful, the company, in this case facebook, usually settles. It has to pay first the plaintiffs lawyers, then the plaintiffs from the company account.

Possibly the government will also impose a hefty fine.

Who pays in the end? The common shareholder.

Even though it's announced as an action against the Company/Zuckerberg, in the end usually the shareholders pay a larger part than they recover.

I would be surprised if a settlement came out of Zuckerberg's private funds.

In reply to by Cognitive Dissonance

Buckaroo Banzai IntercoursetheEU Sun, 07/29/2018 - 23:36 Permalink

This doesn't have anything to do with "lying to the public"-- good grief, if that was a crime that was actually enforced, every single publicly traded company could be sued by shareholders.

No, this is about Zuckerberg refusing to censor so-called "holocaust deniers" from posting their mountains of annoying and troublesome facts and evidence on Facebook, and the kikes on Wall Street unleashing the hounds of war on him for being a traitor to his race. A 20% stock price takedown that shaved $15 billion off his net worth didn't have the desired effect, so now it's time for the (((shareholder))) lawsuits to commence.

In reply to by IntercoursetheEU

Adolfsteinbergovitch topspinslicer Mon, 07/30/2018 - 06:40 Permalink

Military music is to music what military medicine is to medicine. Facebook is not too far off. 

There is no value in Facebook besides whatever information governments extract or inject. That's what they call the new economy: you don't know why is the price so high and the stock so hot until you buy it and it crashes. 

The thing was a scam from day one and now that people have awakened to this, it will drop back to where it came from, interstellar void. 

Of course deep state became so addicted to this easy source of information that they would do whatever it takes to perpetuate its newer and sneakier incarnations.

 

In reply to by topspinslicer

newdoobie Adolfsteinbergovitch Mon, 07/30/2018 - 07:04 Permalink

FB has one product, and no competition to speak of.

As a place to share notes and pics of family and friends its a great product. I connected with several old friends and have renewed old High School friendships.

However, my wife dropped the app from her phone when the FB Marketplace wouldn't stop taking over her phone. My grown kids might check FB once or twice a month to share family news (down from everyday) There is so little ad space on the screen I knew the value of the company was waaaaaay overpriced.

I don't believe it was a scam (it doesn't cost anything but your data).

The only other income stream had to be data mining. Now that limits to data mining and censorship issues have sprung up competition is trying to inject itself. FB will have to improve or it will be overtaken. and of course the value of the company will settle waaaaay down.

In reply to by Adolfsteinbergovitch

Precious Hawk Roacheforque Mon, 07/30/2018 - 06:33 Permalink

If I was a shareholder I would be more pissed off about the political chicanery of the management in general.

At some time they will have to answer for their political bias.  How, when, where? Who knows, but it will come.

If a few Russian twits, sorry, tweets can make a difference, what so an entire regime based on promoting Dems and hiding Reps promotion material.

That can be a real game-changer.

What are the rules about supporting a particular party?  Lawyers????

In reply to by Roacheforque

aloha_snakbar Sun, 07/29/2018 - 22:07 Permalink

I’d love to see Zuckercunt wearing orange and put in general population in someplace like Pelican Bay.... maybe for fun leak that he had a pedo jacket...

Lord Raglan Sun, 07/29/2018 - 22:08 Permalink

The only person on earth who is a bigger dick than this zuckerschmuckerberg is the little faggot who runs the NY Times, sultzschmuckerberger.  (((  )))