As soon as “lock up” period expired, Facebook Inc (NASDAQ:FB) top management, including COO Sheryl Sandberg, have started dumping the company shares. It resulted into a 3 percent decline in Facebook share prices, the biggest drop in the last two months. According to an SEC filing, Sandberg sold approximately 353,000 Facebook shares on Wednesday for about $7.44 million. Sheryl Sandberg still owns about 20 million vested Facebook shares, some of them held in her trust.

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General counsel Theodore Ullyot, who once worked for AOL, Inc. (NYSE:AOL), sold 149,000 shares on Wednesday and Thursday for $3.13 million. Chief Accounting Officer David Spillane sold 256,000 shares, collecting $5.4 million. Now he holds just 160,479 shares.

It’s the first time that the senior management is selling Facebook Inc (NASDAQ:FB) shares after its disastrous IPO in May. Technical glitches at Nasdaq kept the investors confused for hours, underwriters had to pour in millions to support the inflated price and investors lost millions of dollars. Many big market makers, including Knight Capital Group Inc. (NYSE:KCG), sued Nasdaq over the Facebook IPO debacle.

Facebook Inc (NASDAQ:FB) is the only American company to debut at market capitalization above $100 billion, but the stocks have plunged over 40 percent since then, due to concerns over the company’s long-term money making prospects. After the company’s share prices started declining, washing away tens of billions from the firm’s market value, Sandberg and other officials are cashing out some of their shares while they are still worth something.

As the trading restrictions expired last week, roughly 230 million shares became eligible for trading. The “lock up” provisions will expire in several phases that would further lower the company’s stock prices. The lock up restriction on another 777 million Facebook Inc (NASDAQ:FB) shares is going to expire next week, and this is likely to continue till the rest of the year. As of September 30, just 692 million Facebook shares were available for trading.

However, the Menlo Park, California-based company’s 28-year old CEO, Mark Zuckerberg, said he won’t be cashing out his stake in the company until at least September 2013. If Zuckerberg himself starts offloading shares, investors will doubt the future of the company he founded.