Facebook, Morgan Stanley and other Wall Street banks are facing a class-action lawsuit alleging they misled shareholders about the IPO's revenue projections.
The suit, filed in federal court in New York, alleged that the IPO prospectus and registration statement were "false and misleading" and violated the Securities Act. As a result, many people who bought Facebook stock when it began trading Friday lost money as the price of the shares tumbled in recent days.
Facebook stock was up about 3% in early trading Wednesday. But its price of about $32 a share was well below its initial offering price of $38.
Read more at The Los Angeles Times.