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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Workplace Injuries Less Likely Where Employers Provide Paid Sick Leave

September 21, 2012Email ThisPrintNewslettersTweetArticleComments

Workers with access to paid sick leave are 28 percent less likely overall to suffer nonfatal occupational injuries than workers without access to paid sick leave, according to a National Institute for Occupational Safety and Health (NIOSH) study.

The study found that workers in high-risk occupations and industries such as construction, manufacturing, agriculture, and health care and social assistance, appear to benefit most from paid sick leave.

The NIOSH study, by Abay Asfaw, PhD, Regina Pana-Cryan, PhD, and Roger R. Rosa, PhD, was published in the American Journal of Public Health.

The authors suggest that by providing an income, paid sick leave might keep some people who are sick from going back to work before they are ready, thereby making workplaces safer.

The 1993 Family and Medical Leave Act requires employers to provide up to 12 weeks of leave to eligible workers, however this does not have to be paid leave. The researchers said that 43 percent of U.S. private sector workers reported having no access to paid sick leave. The study used data on 38 000 working adults.

The authors conclude that improved access to paid sick leave might help businesses reduce occupational injuries and, in turn, reduce employers’ costs.

“Our findings suggest that, similar to other investments in worker safety and health, introducing or expanding paid sick leave programs might help businesses reduce the incidence of nonfatal occupational injuries, particularly in high-risk sectors and occupations,” the authors wrote.

They also said that previous research has shown that paid sick leave is associated with shorter worker recovery times and reduced complications from minor health problems.

“We hope that our study along with previous research that supports our findings and conclusions will encourage policy makers and employers to consider the overall well-being of workers when making policy or funding decisions. Such a holistic approach would lead to more integrated development of programs that both prevent occupational injury and illness and improve other aspects of worker health,” the authors stated.

Source: NIOSH

 

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