Stock Market News: NASDAQ Failed to Dismiss Facebook IPO Lawsuit
(National Association of Securities Dealers Automated Quotations) failed to win in the dismissal of the case versus Facebook. NASDAQ and Facebook had troubles when the former failed to perform buy and sell of the latter’s shares on May 18, 2012. As a result, Facebook filed a lawsuit. NASDAQ bid the dismissal of the lawsuit but they failed.
Why it Came to This
Facebook took the services of NASDAQ in its IPO (Initial Public Offering). IPO is the time when a corporation first makes their stocks available for public purchase. IPO is undertaken by young companies who need large amounts of capital. A corporation (in this case Facebook) can only have one IPO – that is the first time that it makes its stocks available to the public. After the IPO, the company is said to be public. The first day of the IPO went to $45/share but it dropped to $38/share and lingered there for a long time.
In May 2013, NASDAQ concurred that they will pay $10 million to settle United States SEC (Securities & Exchange Commission) charges over its poor handling of Facebook’s IPO. NASDAQ did not acknowledge their wrongdoing when they agreed to settle. Apart from that, Facebook, together with their Chief Executive Mark Zuckerberg and numerous banks were sued by the investors. The investors believe that they were misled. Facebook is expected to be a part of the Standard & Poor’s 500.
It was Judge Robert Sweet who made the decision. He is a District Judge based in Manhattan. He released a 97 page decision about this matter.