Plaintiffs’ attorneys are jockeying for position to represent shareholders who invested in Facebook’s initial public offering, Law.com reports.
Shareholders filed multiple lawsuits against Facebook, Zuckerber and the IPO’s underwriters, including Morgan Stanley, JP Morgan Chase, and Goldman Sachs. The plaintiffs allege that the defendants misled investors about Facebook’s financial health, resulting in the loss of billions of dollars as the stock’s price fell following the IPO. The plaintiffs further allege that the disclosures to the public about Facebook’s business operations were insufficient, and that it should have disclosed to everyone — not just the underwriting banks that invested in the company leading up to the IPO — that analysts were aware of the risks. But before Facebook and others will stand trial, the question of which Plaintiffs’ firm will lead the charge remains.
Under federal securities litigation rules, the law firm representing the client with the biggest potential loss serves as lead counsel, and those clients are usually institutional investors, Law.com reports. Generally, law firms have 60 days after announcing a lawsuit to amass all potential clients. Thus, the leader of the pack may not emerge until this deadline expires.