Facebook is in it yet again

Facebook is in it yet again

Back in May, Facebook owners and Nasdaq suffered embarrassing mistakes at the loss of investors. Eyes are back on the social media company as settlements are argued over in New York courts and recent information about the company hiding data about mobile risks before their initial public offerings paints Facebook in an even worst light.

The IPO Fiasco

Miscommunications and sloppy execution on its highly anticipated $16 billion IPO (initial public offering) last May have landed Facebook and its adversaries knee deep in hearings and business dispute lawyers in New York over these last weeks. This all began when Facebook investors lost money from technical glitches in the Nasdaq stock market. Additionally, prosecutors claim that Facebook disclosed unflattering information about its business’ future to investors, also leading to losses.

The IPO failure ended in nearly 50 legal actions, 33 of which seeking class-action status, which expectedly will cost them millions to defend. Not only that, but Facebook’s stock dropped, and stayed down, significantly as a result. Facebook suggested merging all of the cases and to settle them in New York’s Southern District, though a lawyer for Nasdaq argued that complete consolidation could “extend through the life of a trial,” as CNBC explains.

Reaching a Settlement and Putting it All Behind Them

Hearing began in New York over losses suffered by Facebook investors late last month in New York courts. Although Facebook headquarters are located in California and lawsuits had been filed in California, Florida, and Washington D.C., nearly all parties agreed on settling the lawsuits in New York, where witnesses, evidence, and underwriter banks are nearby.

More Trouble for Facebook as More Information Surfaces

Most recently, allegations have come up showing that Facebook tried to hide ad effectiveness data, including information about mobile monetization, in the months before its initial public offering. The Securities and Exchange Commission asked for backup documentation about some of Facebook’s social ad related data, but were pushed aside by the company. Disputes with the SEC and their attempts to keep mobile risks hidden in the time before its IPO has not put the company in a good position in their current trails.

When it comes down to it, it’s up to investors to spend their money responsibly or suffer the consequences, but it was Facebook’s responsibility to give them factually sound information about their business, which they clearly failed to do, and are facing great losses because of it. At this point, the company seems eager to do anything in order to put this entire thing behind them, while the investors who lost money in this whole ordeal are eager to be repaid, and are rightfully unhappy with Facebook withholding information that the public should have had.

Written by Drew Hendricks

Drew Hendricks is an SEO and Social Media specialist living in Seattle, Washington. Drew writes words that people enjoy reading every moment they are awake.
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