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Lead plaintiffs in proposed Facebook IPO class-action lawsuit claim to have lost $7.1 million

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Facebook Nasdaq NYC Stock
Facebook Nasdaq NYC Stock

A group of investors who collectively claim to have lost $7.1 million have been named as the lead plantiffs in securities lawsuits that state that Facebook misrepresented its financial conditions prior to its IPO this past May. As reported by Reuters, U.S. District Judge Robert Sweet called the plaintiffs in the proposed class-action case "large, institutional investors with experience representing shareholder classes in similar litigation with the resources to pursue the action" — it sounds like the judge it taking the case seriously and that Facebook won't be let off the hook too easily, despite the risks that naturally come along with investing.

The investors named as lead plantiffs in this case, which include state pension funds in North Carolina and Arkansas, are the result of Judge Sweet's consolidation of the 42 lawsuits that emerged in the wake of Facebook's IPO. That public offering was marred by both tumbling share prices and NASDAQ technical glitches that hurt Facebook's first day on the market. As of now, Facebook is trading at $27.16, quite a bit lower than the $38.37 it closed at after its first day on the market.