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More on the class-action suit against Facebook and Morgan Stanley: The firm handling the suit...

More on the class-action suit against Facebook and Morgan Stanley: The firm handling the suit previously won $7B from Enron. Its complaint alleges remarks made in Facebook's S-1 about its ad outlook were "untrue statements" in light of reports an exec told analysts to lower their forecasts. Particularly incriminating, if true, are reports institutional demand fell due to the disclosure. That would make Facebook's situation the polar opposite of what may have recently happened with Groupon.
Comments (6)
  • Rummeljordan
    , contributor
    Comments (477) | Send Message
     
    People are that mad that they got smoked on the FB trade. How on earth did you not think it was going to be a flop?
    23 May 2012, 11:38 AM Reply Like
  • kwm3
    , contributor
    Comments (2453) | Send Message
     
    "outlooks" and projections are protected from liability under the "safe harbor" for forward looking statements contained in PSLRA,,, unless they have written evidence indicating that the insiders believed different outlooks and they patently lied, then this case is a as big a flop as Faceplant's IPO.
    23 May 2012, 12:24 PM Reply Like
  • Tony Petroski
    , contributor
    Comments (6373) | Send Message
     
    "More on the class-action suit against Facebook and Morgan Stanley: The firm handling the suit previously won $7B from Enron. Its complaint alleges remarks made in Facebook's S-1 about its ad outlook were "untrue statements"

     

    Whee...

     

    When we get married...it's forever...

     

    Let's take a step back.

     

    Class-action guys. The Nation needs a rest.
    23 May 2012, 01:25 PM Reply Like
  • Insurance Bull
    , contributor
    Comments (357) | Send Message
     
    Sounds like the S-1 gave proper warnings to me. FB warns of all the possible dangers of investing in the company. My question is do analysts have to publicly disclose changes in their outlook for private companies? Since FB was technically still a private firm up until the IPO. And analyst's recommendations are based on their own research; which can be correct but also could be flawed. It seems like the lawsuit doesn't have too much substance. I hope the judge does his job.
    23 May 2012, 03:14 PM Reply Like
  • BreakoutTrader
    , contributor
    Comments (36) | Send Message
     
    I think the real issue is the information FB executive passed to the Analyst - should that information be included in the S-1 ?
    24 May 2012, 08:28 AM Reply Like
  • BreakoutTrader
    , contributor
    Comments (36) | Send Message
     
    Some "big" investors who got the information from the Analyst reduced the number of shares they were going to buy as a result
    of the "new" information from the Analyst. This suggests to me
    that that information should have been included in the S-1 or passed
    to the other pre-IPO investors. I think FB is in a bigger trouble than
    MS because the Analyst has NO responsibility to pass the information
    to MS investment bankers and this is actually what is supposed to happen - a wall between research analysts and investment bankers.
    24 May 2012, 08:35 AM Reply Like
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