Facebook Must Face Shareholder Class Actions Over IPO

December 29, 2015

Thomas A. Dubbs remarks on class certification granted in the Facebook IPO Securities and Derivative Litigation

Rejecting Facebook's argument that shareholders should pursue their claims individually, which might prove costly and reduce recoveries, because of wide variations in how much they knew, the judge wrote that "given the extraordinary size of this case," allowing two subclasses "in fact adds more weight to the predominance of common questions and answers, practically negating the individualized questions raised."

The judge also said retail and institutional investors who claimed to lose money from buying Facebook shares at inflated prices in connection with the $16 billion IPO may pursue their respective claims as groups.

Labaton Sucharow was appointed class co-counsel and partner Thomas Dubbs said he is pleased with Sweet's decision.