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Ore. County to ditch tsunami sirens; Resident Objects on Facebook

October 12, 2012Email ThisPrintNewslettersTweetArticle1 Comments

When the big one hits the Oregon coast, people won’t need sirens, say experts

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Facebook IPO Lawsuits to Be Heard in Court in New York

October 5, 2012Email ThisPrintNewslettersTweetArticleCommentsDozens of lawsuits against Facebook Inc., the NASDAQ exchange and various underwriters will be centralized before a federal judge in New York, who must sort through the legal aftermath of Facebook’s botched initial public offering.

A panel of federal judges on Thursday ordered that cases filed around the United States be transferred to U.S. District Judge Robert Sweet in Manhattan. Facebook had requested the transfer, while some investors sought to keep their cases in California.

While some of the cases concern different defendants and claims, “they do involve enough common questions of fact, related circumstances and common discovery to warrant centralization,” the panel said.

Facebook said in a statement that it was pleased with the ruling, and that it would “vigorously” defend itself. An attorney for some of the California plaintiffs declined to comment, while a NASDAQ representative did not immediately respond to a request for comment.

Investors say they lost money due to technical glitches on the Nasdaq stock market and accuse the company of selectively disclosing unflattering information about its business prospects to Wall Street analysts who then shared it with privileged investors.

The lawsuits, which are seeking unspecified damages, could cost Facebook millions of dollars to defend as it strives to put the IPO behind it.

Facebook’s stock tumbled as much as 50 percent after its debut at $38 per share. It closed at $21.95 on Thursday.

In at least 33 lawsuits seeking class action status, investors have asked courts to hold the company and its underwriters responsible for causing their losses.

Facebook has said that it did not violate any rules and that NASDAQ was to blame for trading glitches on the day of the offering.

Grouping cases together keeps similar lawsuits from proceeding at the same time in different courts.

Lawsuits against NASDAQ OMX Group Inc., which accuse the exchange of being negligent in failing to execute trades in the face of record-breaking volume during the IPO, will also be in front of Sweet.

But the exchange has already asked that their cases proceed on a separate track from the Facebook lawsuits.

The case is In Re: Facebook Inc, IPO Securities and Derivative Litigation, U.S. Judicial Panel on Multidistrict Litigation, No. 12-md-2389.

 

 

Copyright 2012 Reuters. Click for restrictions.Email ThisPrintNewslettersTweetCategories: National NewsTopics: D&O, Directors & Officers, Facebook IPO, investors lawsuit, NasdaqHave a hot lead? Email us at newsdesk

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Facebook IPO Lawsuits Likely to Be Heard by New York Judge

September 21, 2012Email ThisPrintNewslettersTweetArticleCommentsFacebook Inc. and most of its adversaries in a raft of lawsuits over its $16 billion initial public offering can agree on at least one thing: that the cases should be heard in a New York court.

At a hearing on Thursday, lawyers for both sides asked a judicial panel to pool together dozens of lawsuits against the social networking company in Manhattan federal court. The panel made no immediate ruling, but did not question the idea of grouping the cases in New York.

In at least 33 lawsuits seeking class-action status, Facebook investors have asked courts to hold the company and its underwriters responsible for causing them losses in the IPO in May. Investors say they lost money due to technical glitches on the Nasdaq stock market and accuse the company of selectively disclosing unflattering information about its business prospects to Wall Street analysts who then shared it with privileged investors.

Facebook’s IPO was one of the most hotly anticipated in recent memory, but the technical malfunctions embarrassed the company and the NASDAQ. The lawsuits, which seek unspecified damages, could cost Facebook millions of dollars to defend, as it strives to put the IPO problems behind it.

While lawsuits have been also been filed in California, Florida and Washington, D.C., most plaintiffs and the defendants say the cases should proceed in New York because witnesses, evidence relating to the IPO, and the underwriter banks are all in that city.

“We’re glad to be in New York and we’d like to stay here,” Andrew Clubok, a lawyer for Facebook, told the Judicial Panel on Multidistrict Litigation at the hearing in Manhattan federal court.

The only lawyer to speak against consolidation of the cases represented plaintiffs in two “derivative” lawsuits currently before a federal judge in San Francisco. Those suits seek to hold Facebook’s board and Chief Executive Mark Zuckerberg responsible for damage they claim was done to the company.

The derivatives plaintiffs say the litigation should take place in California state court, near Facebook’s headquarters, for easy access to witnesses and documents.

The 11-judge multidistrict panel, which meets periodically to decide where wide-ranging litigation should be consolidated, is expected to issue a decision within weeks. Seven judges were present for Thursday’s hearing.

Most of the cases are in New York already, and have been added to the docket of Manhattan federal judge Robert Sweet ever since he was randomly assigned the first complaint.

“There may be a good chance that Judge Sweet could get this case,” panel Judge Paul Barbadoro of New Hampshire said, prompting laughs from the crowded courtroom.

Facebook has said that it did not violate any rules and that Nasdaq was to blame for trading glitches on its first day of trading.

NASDAQ OMX Group Inc. is also facing investor lawsuits that claim it was negligent in failing to execute trades in the face of record-breaking volume during the IPO.

William Slaughter, an attorney for NASDAQ, told the judges on Thursday that the exchange agreed those cases should also be before Judge Sweet, but that they should proceed on a separate track from the Facebook lawsuits.

“The two sets of actions … really don’t have much in common,” he said.

The case is In Re: Facebook Inc., IPO Securities and Derivative Litigation, U.S. Judicial Panel on Multidistrict Litigation, No. 12-md-2389.

 

Copyright 2012 Reuters. Click for restrictions.Email ThisPrintNewslettersTweetCategories: National NewsTopics: D&O liability, directors and officers liability, Facebook IPO, Facebook IPO lawsuits, securities lawsuitsHave a hot lead? Email us at newsdesk

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Nasdaq Offers $40 Million to Cover Facebook IPO Losses

June 7, 2012Email ThisPrintNewslettersTweetArticleCommentsNasdaq OMX Group Inc. said it will offer cash and rebates totaling $40 million to compensate clients affected by the problems with Facebook Inc.’s initial public offering, an amount well short of the losses claimed by top market makers for the IPO.

After approval by regulators, Nasdaq said on Wednesday, $13.7 million would be paid to its affected member firms and the balance would be credited to members to reduce trading costs, with all benefits expected to be awarded within six months.

The idea of rebates has caused some concern at other exchanges. Sources at Nasdaq rivals said that such a plan would force brokers to trade at Nasdaq, taking market share from competing exchanges.

“This is tantamount to forcing the industry to subsidize Nasdaq’s missteps and would establish a harmful precedent that could have far reaching implications for the markets, investors and the public interest,” NYSE Euronext, Nasdaq’s main competitor, said in a statement Wednesday afternoon.

“We intend to strongly press our views that Nasdaq’s proposal cannot be allowed to permit an unjust and anti-competitive situation.”

The top four market makers in the $16 billion Facebook IPO – UBS, Citigroup, Knight Capital, and Citadel Securities – together lost upward of $115 million due to technical problems that prevented them from knowing for about two hours if their orders had gone through after Facebook began trading.

Smaller market makers that might have suffered losses would also receive a part of the $40 million. Two senior executives in the financial industry have said they expect Nasdaq member claims to total $150 million to $200 million.

“Our expectation is that every firm will receive some measure of cash and that every firm will receive their full accommodation by year end if current trading patterns persist,” Eric Noll, executive vice president for transaction services at Nasdaq OMX, said in a webcast to member firms.

Under the plan, investors who attempted to buy the company’s shares at $42 or less, but whose orders were not executed, would be eligible for compensation. In addition, trades that were executed at an inferior price would also be eligible, as well as trades that did go through successfully but were not confirmed because of Nasdaq’s technical problems.

A filing with the U.S. Securities and Exchange Commission is expected soon, and an executive from a rival exchange declined to comment until its publication.

“They clearly screwed up. They clearly owe their customers money,” said former SEC Chairman Arthur Levitt. He declined to comment on whether the situation warranted an SEC investigation or fine.

Nasdaq’s Noll said the exchange is still engaged in a review process with the SEC. It is unclear how long that process will take or how long the SEC will take to decide if Nasdaq’s proposal for compensation is adequate.

He said that the factors that went into determining the $40 million figure included the exchange’s liability cap of $3 million a month, Nasdaq’s proceeds of $10.7 million from the Facebook IPO, and an estimated $7 million in revenue forecast over the next five years from Facebook trading and listing fees.

During the first day of Facebook trading, technical glitches left the market makers – who facilitate trades for brokers and are crucial to the smooth operation of stock trading – in the dark for hours as to which trades had gone through.

Nasdaq’s immediate response amounted to a members-only call with one of its executive vice presidents and a statement that the exchange would set aside a pool of $13.7 million to accommodate losses.

On a call with select reporters the Sunday after the Facebook IPO, Nasdaq Chief Executive Robert Greifeld said Nasdaq was “humbly embarrassed” over the trading glitch, but he stopped short of a public apology.

 

 

Copyright 2012 Reuters. Click for restrictions.Email ThisPrintNewslettersTweetCategories: National NewsTopics: Facebook IPO, NasdaqHave a hot lead? Email us at newsdesk

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