On Air Now

Listen

Listen Live Now » 93.7 FM Sheboygan, WI

Weather

Current Conditions(Sheboygan,WI 53081)

More Weather »
58° Feels Like: 58°
Wind: WSW 5 mph Past 24 hrs - Precip: 0”
Current Radar for Zip

Today

Partly Cloudy 76°

Tonight

Clear 60°

Tomorrow

Mostly Sunny 78°

Alerts

U.S. judge names lead plaintiffs in Facebook litigation

Facebook logos on a computer screen are seen in this photo illustration taken in Lavigny May 16, 2012. REUTERS/Valentin Flauraud
Facebook logos on a computer screen are seen in this photo illustration taken in Lavigny May 16, 2012. REUTERS/Valentin Flauraud

By Nate Raymond

NEW YORK (Reuters) - A group of investors including state pension funds in North Carolina and Arkansas will be the lead plaintiffs in securities lawsuits arising out of Facebook Inc's $16 billion initial public offering, a U.S. judge ruled on Thursday.

The investors, in a proposed class-action case, have accused Facebook of misrepresenting its financial condition in the run-up to the May stock offering. They are represented by law firms Bernstein Litowitz Berger & Grossmann and Labaton Sucharow.

The ruling helps set a structure for the Facebook IPO litigation, a headache for the social media company and a nagging reminder of the technical glitches in the highly anticipated stock market debut.

U.S. District Judge Robert Sweet in Manhattan also named lead plaintiffs for lawsuits against NASDAQ OMX Group Inc stemming from the IPO. NASDAQ was sued over allegations that orders to buy and sell Facebook were not properly executed on the first day of trading.

Facebook, which has defended its pre-IPO disclosures, declined to comment on Thursday. A spokesman for NASDAQ declined to comment on the litigation.

Facebook shares made their debut at $38 per share, and later fell as much as 50 percent. On Thursday, they closed at $26.90, down 2.6 percent.

Sweet consolidated the cases and picked lead plaintiffs to head up most of the 42 lawsuits before him arising out of the IPO.

Under a federal law governing securities lawsuits, courts routinely select a lead plaintiff in class actions. The lead plaintiff typically is the shareholder with the biggest losses, though judges have discretion to pick a different investor.

The plaintiff group picked to lead 31 cases alleging securities violations against Facebook includes the North Carolina Retirement Systems, Arkansas Teacher Retirement System, the Fresno County Employees' Retirement Association and Banyan Capital Master Fund Ltd.

The group has collectively claimed a combined $7.1 million in losses.

"Its members are large, institutional investors with experience representing shareholder classes in similar litigation with the resources to pursue the action," Sweet said.

In the securities lawsuits against NASDAQ, the judge said First New York Securities LLC, T3 Trading Group LLC, and Avatar Securities LLC would act as co-lead plaintiffs. The group traded a combined $316 million in Facebook shares the day of the IPO, the decision said.

The case is In re Facebook, Inc, IPO Securities and Derivative Litigation, U.S. District Court, Southern District of New York, MDL No. 12-2389.

(Reporting by Nate Raymond; Editing by Martha Graybow)

Comments