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Facebook and flotation banks face lawsuit

  • Facebook and its founder Mark Zuckerberg along with the banks behind its flotation are being sued by irate shareholders.

    A writ filed in a Manhattan court alleges that Facebook's revised growth figures were not disclosed to all investors.

    U.S. financial regulators have already said they will look into Morgan Stanley, the lead underwriter to Facebook, over the disclosure of information ahead of Friday's float.

    The flotation was disrupted due to technical glitches on the Nasdaq Stock Exchange.

    Since then, the share price has plummeted over fears the company was overvalued by advisers marketing the float.

    The shares listed at $38 each and fell as low as $31 on Tuesday but closed up 3.2 percent at $32 on Wednesday.