Business litigation can often seem relatively complicated compared to lawsuits filed between average citizens. A recent group of business litigation cases revolving around famed social media network Facebook could be considered even more complex than most. A slew of lawsuits have been filed in various states, including California, in the wake of the network’s less-than-stellar stock market debut. Before any of those cases can play out, however, a panel made up of several federal judges is considering whether it should consolidate the cases together and, if so, where they will be tried.
These lawsuits arose after investors decided to sue over the fact that Facebook’s public offering debut seemed to be shadowed by a series of technical troubles. There were also accusations that company insiders leaked unflattering tidbits about the company’s actual financial prospects to certain favored investors. Since the day of its public debut, the price for shares of Facebook stock has plummeted as much as 50 percent from its initial $38 value.
Many expect that the panel of federal judges will decide to assign the cases to be heard in New York, since the underwriter banks, many witnesses, and evidence related to the IPO (Initial Public Offering) are all located there. A good number of investors who have filed lawsuits seem to agree with Facebook’s argument that the cases should be tried there. Some of the investors, however, feel that San Francisco, California would be a preferable venue for the consolidated cases. They argue that since Facebook’s home turf is located nearby, that would be a more appropriate venue since it would grant easy access to many witnesses and documents.
While it’s not yet apparent which location the federal panel will settle upon, it’s likely that the issue will be widely watched from many in the business world. Business litigation cases like this one may seem complex, but for the companies and individuals involved they can be a valuable method for ensuring that their rights and financial interests are protected.
Source: Chicago Tribune, “U.S. judges to decide venue for Facebook lawsuits,” Tom Hals and Basil Katz, Sept. 19, 2012