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2 Jun, 2012

Facebook Hit By Class Action Lawsuit for Alleged U.S. Securities Act Violations


SAN FRANCISCO, June 1, 2012 –(BUSINESS WIRE) — The U.S. law firm, Pearson, Simon, Warshaw & Penny, LLP filed on May 31, 2012, in the United States District Court for the Northern District of California, a securities class action against Facebook, Inc., its officers and directors who signed Facebook’s registration statement, and the lead underwriters for the Initial Public Offering  of Facebook’s common stock.  Those underwriters include Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC, Goldman, Sachs & Co., Merrill Lynch Pierce Fenner & Smith, Inc. and Barclays Capital, Inc.

This securities class action is brought on behalf of all persons and institutions who purchased Facebook common stock pursuant and/or traceable to Facebook’s IPO that commenced on May 18, 2012. The IPO, made pursuant to a registration statement filed with the Securities & Exchange Commission and declared effective on May 18, 2012, sold at least 421 million shares of Facebook common stock at a price of $38 per share.

The Complaint, which can be reviewed at www.pswplaw.com, alleges that the registration statement and prospectus for the Facebook IPO shares contained untrue statements of material facts or failed to state material facts necessary to make the statements made not misleading.

The Complaint alleges that the registration statement also failed to comply with the rules and regulations established by the SEC as to the contents and disclosures required to be made in a registration statement. In particular, the registration statement did not comply with Item 303 of SEC regulation S-K which requires that a registrant must “describe any known trends or uncertainties . . . that the registrant reasonably expects will have a material . . . unfavorable impact on . . . revenues or income from continuing operations.” As alleged in the Complaint, Defendants had an affirmative obligation to disclose in the registration statement the impact of adverse trends on Facebook’s second quarter and fiscal year revenues and earnings.

On May 30, 2012, Facebook common stock closed on the NASDAQ stock market at $28.19 per share, a 25.8% decline from its IPO price of $38 per share. The Complaint alleges that, as a direct result of Defendants’ violations of the federal securities laws, members of the Plaintiff Class have suffered billions of dollars of losses.

This Notice is made pursuant to the Private Securities Litigation Reform Act of 1995 (the “PSLRA”) to advise members of the Plaintiff Class who purchased Facebook common stock that if you wish to serve as lead plaintiff, as that term is defined in the PSLRA, you must file a motion for appointment as lead plaintiff no later than July 23, 2012.

Pearson, Simon, Warshaw & Penny, LLP encourages all Facebook investors to investigate the claims made in the Facebook Class Action fully before deciding whether to seek appointment as lead plaintiff. If you wish to discuss the claims against Facebook and the other Defendants or have questions regarding your rights as a member of the Plaintiff Class, please contact either George S. Trevor or William J. Newsom at (415) 433-9000 or you may e-mail them at gtrevor@pswplaw.com or wnewsom@pswplaw.com.