Facebook, Zuckerberg Face Class Action Suits Alleging Misleading Statements

Facebook and several key executives, including CEO Mark Zuckerberg, are facing federal class action lawsuits alleging the social network made false and misleading statements related to the decline of monthly active users prior to the second quarter earnings report.

Pomeranz Law Firm announced that a lawsuit was filed in the U.S. District Court for the Northern District of California, alleging the company and certain officers made false and misleading statements and failed to disclose the decline of daily and monthly active users.

Kaskela Law filed a similar class action suit in the U.S. District Court for the Southern District of New York. The suit alleges that the company declined to notify investors that it expected the reductions, due to plans to promote Facebook with lower levels of modernization, currency changes and other factors.

Kaskela is asking investors with losses in excess of $100,000 to contact it. This would involve investors who bought stock between April 26 and July 25.

Facebook shares dropped sharply on Wednesday. It missed Wall Street estimates on both earnings and users during its second quarter earnings report, leading the share price to drop as much as 24 percent.

Facebook also reported that revenue rose 42 percent to $13.23 billion, missing analysts’ estimates of $13.36 billion, and daily active users reached only 1.47 billion by June — analysts estimated 1.49 billion. Earnings, however, hit $1.74 a share, beating Wall Street’s estimates of $1.72.

Facebook spokesperson Vanessa Chan declined to comment in connection with the suits.



The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.