Facebook Inc. and a group of banks asked a federal judge to throw out investor claims that the company misled them about its financial condition before last year's initial public offering.
The $75.9 billion North Carolina Retirement Systems, Raleigh, led a group of institutional investors in August in claiming the defendants, including Facebook co-founder and CEO Mark Zuckerberg and other company executives, overstated the prospects for earnings and growth in the mobile market before the IPO in May 2012. The investors claim they lost money after the public offering of shares.
The Facebook defendants and a group of more than 30 banks that underwrote the offering asked U.S. District Judge Robert Sweet in Manhattan on Tuesday to dismiss the investors' claims. Facebook, based in Menlo Park, Calif., operates the world's biggest social network.
The investors “do no better than claim that Facebook misled investors by warning that increased mobile usage and product decisions 'may negatively affect our revenue,'” the defendants said in a brief filed with the court Tuesday. “There is no plausible basis to claim that this somehow misled the public about what already was known and disclosed about the increase in mobile usage and about product decisions.”
The banks seeking dismissal of the suit include Morgan Stanley, Goldman Sachs and J.P. Morgan Securities.