In re Facebook, Inc. IPO Derivative Litig., No. 14-1445 (2d Cir. 2015)
Annotate this CasePlaintiffs appealed the dismissal of their putative shareholder derivative actions against Facebook and its directors and lead underwriters. Plaintiffs alleged that Facebook’s directors breached duties owed to the company because its Registration Statement failed to disclose the mid‐quarter impact of mobile usage on the company’s projected growth. The court concluded that it was not error for the district court to decide, as a threshold matter, whether plaintiffs adequately pleaded contemporaneous share ownership, as required by Federal Rule of Civil Procedure 23.1. The court affirmed the judgment because none of the putative plaintiffs satisfied this requirement. The court did not reach the additional bases for dismissal raised by the district court or Facebook.
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