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TechCrunch - Petition for Discovery Surrounding Alleged Facebook IPO Fraud

TechCrunch - Petition for Discovery Surrounding Alleged Facebook IPO Fraud

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Published by Josh Constine
For details, read: http://techcrunch.com/2012/06/13/court-denies-petition-to-question-zuckerberg-and-banks-about-alleged-facebook-ipo-fraud/
For details, read: http://techcrunch.com/2012/06/13/court-denies-petition-to-question-zuckerberg-and-banks-about-alleged-facebook-ipo-fraud/

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Published by: Josh Constine on Jun 14, 2012
Copyright:Attribution Non-commercial

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06/14/2012

 
IN
THE
UNITEDSTATES
DISTRICTCOURT
FOR
THE WESTERNDISTRICT OF
TEXASAUSTIN
DIVISION
BOGDAN
RENTEA,
§
§
Petitioner,
§
§
vs.
§
§
FACEBOOK,
INC.,
MARK
§
ZUCKERBERG, DAVID
A.
EBERSMAN
§
DAVID
M.
SPILLANE,MORGAN
§
STANLEY
&
CO.,LLC,J.P.
MORGAN
§
SECURITIES, LLC,GOLDMAN SACHS
§
&CO.
§
Respondents
§
2OI2JUN-6
PM:53
CLE
U
r
CURT
WESTEiU
DISTRICT
Of
TEXAS
DFPur\
CIVIL ACTIONNO.
Al2l(.O492
LY
VERIFIED PETITIONTO PERPETUATE TESTIMONY
NOW
COMES
Bogdan
Rentea, and
files this,
his Verified Petition
to
PerpetuateTestimony
and wouldrespectfully show thisHonorable Court
as
follows:
1.
This
Petition
is
filed
under theprovisions
of
Rule
27
of
the
F.R.C.P.
2.
The
Petitioner
expects
to
be
a
Plaintiff
in
a
claimagainst Respondents
in
thisCourt and assert claims
for
violation
of
Section
11,
1
2(a)(2),and
15
of
theSecurities ExchangeAct
of
1933
in connection
with the spectacular
failure and reportedfraud inconnection with the Facebook
IPO.
3.
The
Petitionerbought
shares in
Facebook on the
IPO
on
May
18,
2012.He
actually placed
his
order
on
May
17,
2012, itwas filled the
nextday
at
$42.00,and
at
the filing
of
this
Petition trades below
$27.00.The
causeappears
to
befar
from
just
trading misfortune,
if
one
believeswhat
is
reportedin the press.
Petition
to
Perpetuate TestimonyPage
1
of5
Case 1:12-mc-00492-LY Document 1 Filed 06/06/12 Page 1 of 5
 
4.
Todate,
several classaction lawsuitshave
been
filed,
mostly
in theSouthern District
of
New York(None in
this District).The
Petitioner
does
not intend
to
join
in
any
of
them and herebyopts
out
if
such decision
is
important
herein. Almost
all
are
basedupon newspaperaccountsandreports fromReuters,
the
MotleyFool
and others,
detailing allegedseriousimproprietiesin
thedays leading up to the
IPO.
If
true,
theallegations
area
clearbasis
for claims
of
serious
security lawsviolations.
5.
The
problemwith thereports
is
that they
are
that
just
that, reportsand
not
facts.
The
Petitionerdesires
to
conductactual formal discoverythrough
oral
depositions
and
requests fordocuments
to
determinethe following
facts:
a.
DidFacebook indeedreport any negativeinformation
to
theunderwritersduringthe
IPO's
road show whichwas material
to an
investmentdecision, butwhich
did
not make
its
way
into
requiredpublic
documents.
b.
Did any
of
the underwritersdisclose this informationto
just
some,
butnotthe wholeinvesting
public.
c.
Didany
of
theRespondentstake any action
to
artificiallyincreasetheprice
of
the offeringbefore the shares
weremade available
to
thepublic,
in order
to
personallybenefit beforethe truth
came
out.
d.
Other than
to
"make history"
as
the
highest
IPO ever,
why
wasthe IPO
priced
at
$38.00given the alleged
roadshow disclosures.
Petition
to
PerpetuateTestimonyPage
2
of4
Case 1:12-mc-00492-LY Document 1 Filed 06/06/12 Page 2 of 5
 
e.
The identity
of
the persons responsiblefor any
of
the aboveenumerated actions
at
Facebook
and
at
the variousunderwriters.
6.
The
Petitioner
attaches hereto
a
sampling
of
the class actioncomplaintsfiled
to
date
as
Exhibits
A
and
B.
7.
The
Petitioner
seeks to
depose the followingpersons or
designatedrepresentatives
of
the corporate Respondents
with
the
most knowledge
onthematters designatedabove,
to wit:
a.
MarkZuckerberg ("Zuckerberg")
whohas served
as
Facebook'sChief
Executive Officer("CEO")
and a
member
of
the Facebookboardssince
July
2004and has
been Chairman
of
theboard since
January
2012.
Zuckerbergsigned the registration statementfor the
IPO,filed
with the
SECon
May
16,
2012 (the
"RegistrationStatement")Zuckerberg
was also
a
selling shareholder on theIPO selling125,995,713shares on the
IPO.
b.
David
A.
Ebersman("Ebersman") whohas served
as
Facebook'sChief
Financial Officer("Officer")
since
September
2009.
Ebersman
signed the RegistrationStatement.
c.
David
M.
Spillane("Spillane") who has served
as
Facebook's Chief
Accounting Officersince prior
to
the
IPO.
Spillane signedtheRegistration
Statement.
d.
Designatedrepresentative(s)
of
Morgan Stanley
&
Co., LLC
("Morgan
Stanley") whowas
a
co-lead underwriterfor the IPO andalso served
as
representative
of
all
of
the
other underwriters
of
the
IPO.
Petition
to
PerpetuateTestimonyPage
3
of4
Case 1:12-mc-00492-LY Document 1 Filed 06/06/12 Page 3 of 5

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