Mark Zuckerberg and mega-social media site Facebook have both been in the news quite a bit recently, between the company’s disastrous IPO and the many, many people who are unhappy with it. Now, a class-action lawsuit is being brought against Zuckerberg by some of those unhappy investors, who claim the mogul unloaded a huge amount of stock on inside information that it wasn’t worth its estimated value.
Zuckerberg is no stranger to legal battles; last year he was sued over a Facebook page that garnered a wave of backlash from the Jewish community, and just a week after the company went public, they were sued for hiding “unfavorable growth forecasts” before the IPO. Oh, and there was that whole Winklevoss scandal.
This lawsuit, however, could get big very quickly. It claims that JP Morgan, Goldman Sachs, and Morgan Stanley all tipped off only the investors with the largest stake in the company about the serious undervalue of the stock well before the IPO, leaving everyone else who invested their hard earned dollars in the dust. As of Monday morning, shares had fallen to around $26.00 apiece, far below the initial $38.00 projected value.
Former Wall Street analyst Henry Blodget spoke up on behalf of investors, calling the insider trading allegations “absurd and unfair.” He goes on to say that the SEC should change their rules about such information being shared, asserting that every investor has the right to know what’s going on with the IPO.
“This is an absurd and unfair practice,” he said. “The estimates themselves are material information–the consensus of smart, well-trained analysts who have worked with the company’s management to develop realistic forecasts. Most investors don’t even know that these estimates exist, let alone that they’re whispered verbally to only a handful of big investors. All potential investors should have easy access to these estimates, as well as to any logic underlying them. The SEC needs to change the rules here.”
While the exact amount of Zuckerberg’s sold shares isn’t known, rumors put it around a billion dollars, and that adds up to a lot of angry stockholders. There have been accusations that Zuckerberg himself is to blame for the disastrous IPO on the grounds that he is an egomaniac who allowed the company to offer inflated projections in order to justify Facebook’s $100 billion valuation.
The fact that Facebook’s head honcho took off on a honeymoon right after the stocks began to tank isn’t sitting well with investors, either. It looks like this case could get nasty very quickly as the very people who are supporting Facebook are demanding answers and accountability from its owner.

RT @AskKissy LOL. Mark got over.. Aren’t you glad you couldn’t afford to buy the stock? http://t.co/mmDLvsoT
2 minutes ago via UberSocial for Android · powered by @socialditto
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When are people going to realize Zuckerberg is a horrible person? “Facebook, Mark Zuckerberg, Banks Sued Over IPO” http://t.co/wJIwuKEN
27 minutes ago via Tweetbot for iOS · powered by @socialditto
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I guess someone is having a more stressful day than me…Mark Zuckerberg Sued For Unloading Facebook Stock #WebProNews http://t.co/LyD1A4Ip
46 minutes ago via Tweet Button · powered by @socialditto
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