Facebook Inc (NASDAQ:FB) and dozens of banks have asked a judge to dismiss a lawsuit in connection with the company’s initial public offering last year. The suit accuses the social media network of misleading interested investors about its finances before the IPO. The banks involved in the suit include Morgan Stanley (NYSE:MS), which served as the IPO’s lead underwriter.
On Wednesday court papers showed that Facebook said it wasn’t obligated to release internal projections about how increasing mobile usage and decisions about various products might impact its future revenue—even if those projects had been provided to the analysts of its underwriters. Reuters was one of the first to report on the court papers.
The papers also said that the Securities and Exchange Commission hasn’t required broad disclosure for most companies because of how it might impact their ability to raise money through their IPO. They said the SEC would have to retroactively impose a rule which it has rejected for decades.
Facebook IPO Lawsuits Consolidated
The case Facebook Inc (NASDAQ:FB) is trying to get thrown out of court covers 31 lawsuits filed against it in connection with its IPO. A panel of federal judges consolidated the suits late last year.
The same judge who oversees this case is also overseeing separate lawsuits filed against NASDAQ OMX Group, Inc. (NASDAQ:NDAQ) by investors who claimed that orders for shares of Facebook were not executed properly on the first day the stock was traded on the exchange.
Facebook Inc (FB)’s stock went public at $38 per share last year and rose to $45 per share on the first day of trading. However, it has not topped its opening price since then. Today shares of Facebook Inc (NASDAQ:FB) fell as much as 1 percent at the NASDAQ.