Facebook founder Mark Zuckerberg has been sued by the social media network's shareholders over its disastrous IPO.
By Telegraph staff2:25PM BST 23 May 2012
The lawsuit accuses Mr Zuckerberg, Facebook and several banks led by Morgan Stanley of hiding the company's weakened growth forecasts ahead of its $16bn initial public offering.
The defendants are claimed to have concealed from investors during the IPO marketing process "a severe and pronounced reduction" in Facebook revenue growth forecasts.
The news comes as Morgan Stanley, the bank in charge of the IPO, is being investigated over possible securites fraud.
The US bank has been accused of failing to warn smaller investors of a more negative assessment of Facebook's future profits.
It is claimed that several major investors had been pre-warned that a Morgan Stanley analyst had cut the amount of money he expected Facebook to make.
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