A lawsuit against Facebook and a group of banks is moving forward, following a new decision from a federal judge today. Manhattan federal judge Robert Sweet says unhappy investors can pursue claims that the social network botched certain disclosures in its initial public offering last May. That suit, filed in June last year, claims Facebook "selectively" disclosed parts of its revenue outlook to only some investors and not all. Those estimates were trimmed based on expectations of increased mobile use, something the company had trouble making money on versus desktop users.
Angry investors and soaring stock
On top of targeting Facebook, Reuters notes that Sweet said the suit can go after NASDAQ OMX for issues that affected early trades of Facebook's stock. As part of the complaint, investors claimed trades took hours to process — or worse, didn't go through at all — leaving buyers in a lurch as the price fluctuated in early trading.
The lawsuit comes as Facebook's stock reaches new all-time highs, and the company's building up its advertising on mobile devices to push revenue. Earlier this week the company began displaying auto-playing ads on its mobile apps, something that's been commonplace for desktop internet sites for years, but only recently become more viable on phones as cellular speeds increase.