“…A major point of contention is the claim that a “severe reduction in revenue growth” – linked to the growing numbers of users accessing the website on mobile phones rather than computers – was concealed.
Facebook, which is being sued as a company along with Mr Zuckerberg, other leading executives at the company and its lead underwriters – Morgan Stanley and Goldman Sachs – has denied the claims. Another lawsuit filed in California claims Facebook and its banks actively misled investors. The banks deny any wrongdoing.
However, the claim that Mr Zuckerberg was able to profit by selling his shares in the knowledge that the share value would likely decline, while others bought in without the benefit of the facts, has heightened the controversy.
It has even led to the term “Zucked” being coined to describe what happened to the investors who lost money.
The US Senate Banking Committee has announced it is to investigate the affair, after which its chairman, Senator Tim Johnson, will decide if public hearings should be held.”