Attys Divided Over Prospects of Facebook Shareholder Suits
By Dunstan Prial
March 27, 2018
Ron Colombo, a professor at Hofstra University’s Maurice A. Deane School of Law, said the suits alleging securities violations under Rule [10b-5], the antifraud provision, might meet with success.
“Under securities laws, a publicly traded company like Facebook is under obligations to report information accurately and completely,” he said. “You have to make full and adequate disclosures to shareholders on all material information. So to the extent that in its filings with shareholders, Facebook wasn’t forthcoming about its practices, in other words to the extent that they hid a potential risk, they could be slammed for that under the securities laws.”
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