Facebook and banks sued by shareholders over IPO

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Facebook and banks sued by shareholders over IPO
What should have been a historic day for Facebook has turned into a nightmare with investors now suing the social networking giant together with its lead underwriters Goldman Sachs Group Inc. and JPMorgan Chase & Co. The investors are claiming that the companies associated with the USD 16 billion IPO chose to play down the growth forecast of Facebook.

Facebook is being accused of hiding its revenue growth forecast arising from the increased use of Facebook's mobile app or mobile website.

Investors also sued Nasdaq OMX group Inc stating that the exchange mishandled the trades in Facebook stock.

Lawsuit filed in the U.S. District Court in Manhattan is seeking class action status and the investor group is claiming to have lost more than USD 2.5 billion since Facebook's IPO.

Facebook had gone public last Friday with a price of USD 38 per share. On debut the share expectedly rose but has since plunged nearly 19 per cent.

DION Global Solutions Ltd

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