A federal judge said Facebook Inc, Chief Executive Mark Zuckerberg and dozens of banks must face a lawsuit accusing the social media company of misleading investors about its financial condition before its $16 billion initial public offering last year.
Continue Reading Below
In a decision made public on Wednesday, U.S. District Judge Robert Sweet in Manhattan said investors could pursue claims that Facebook omitted material information from its registration statement.
The investors had alleged, among other things, that Facebook should have disclosed internal projections on how increased mobile usage and product decisions might reduce future revenue.
On Monday, Sweet ruled that investors could also pursue claims accusing Nasdaq OMX Group Inc of concealing technology problems that resulted in difficulties in processing trades on Facebook's first day of trading.