Zynga faces lawsuit alleging executives engaged in insider trading

After last week’s second quarter earnings call, Zynga’s stock price tumbled even lower and five legal firms announced they were investigating allegations that members of the company engaged in insider trading. Today, VentureBeat is reporting San Francisco-based firm Newman Ferrara has filed a class-action lawsuit against Zynga, the company’s directors and associated brokerages.

The suit was filed on behalf of Mark H. DeStefano and “all other persons similarly situated.” The main allegations are based around how Zynga set the initial executive lock-up agreement to expire on May 28, 2012 (ten days after Facebook’s IPO and Zynga’s stock plummet), issued positive statements about its anticipated bookings and then revised the lock-up agreement in March. The new lock-up expiration date allowed the defendants to sell their shares on April 3 for $12 a share, generating proceeds of over $500 million.

The suit also claims, “Zynga misrepresented or failed to disclose material adverse facts about its business, operations, and growth prospects including, among other things, that: (1) Zynga had been experiencing a rapid decline in user numbers and virtual goods sold in existing web games; (2) Zynga had faced substantial delays in launching new web games; and (3) Zynga’s revenue and bookings were entirely dependent on Facebook’s online gaming platform.”

Zynga has yet to publicly respond to the lawsuit. At the time of writing, the company’s shares are trading at $2.93.

 

Sponsored Post

Hands-On Social Media Training for Beginners


Social Media 101
In our Social Media 101 boot camp, you’ll determine the social media sites that matter most to you, based on personal and professional goals. Starting May 13, you will learn the best practices for using Facebook, Twitter, LinkedIn, Google+, Pinterest, Instagram and Tumblr, along with complete personal profiles on each site. Register today!

Leave a Reply

2 Responses to “Zynga faces lawsuit alleging executives engaged in insider trading”

  1. This week’s headlines from across Inside Network says:

    [...] Zynga faces lawsuit alleging executives engaged in insider trading [...]

  2. Zynga y el ¿ocaso? de los juegos sociales | Iván Fanego says:

    [...] Eurogamer. De todas formas, parece haber otros motivos adicionales en la caída de las acciones (siempre hay algo [...]

interested in advertising with inside social games?

Social Media Jobs
of the Day

Manager Social Media

Ralph Lauren
New York, NY

Social Media Manager

Superfly
Chicago, IL

Social Media + Web Management Consultant

IPPF/Western Hemisphere Region
New York, NY

Director of Marketing (Social Media/Web)

Creative Circle
Corona, CA

Featured Company

Join leading companies like this one and recruit from the nation's top media job seekers on the Mediabistro Job Board. Every job post comes with our satisfaction guarantee. Learn More
 

Our Sponsors

Also from Inside Network:   AppData - Facebook & iOS Application Stats   PageData - Engagement Data on Facebook Pages   Facebook Marketing Bible   Inside Network Research
 
home | site map | advertising/sponsorships | about | careers | contact us | help courses | browse jobs | freelancers | events | forums | content | member benefits | reprints & permissions terms of use | privacy policy Copyright © 2014 Mediabistro Inc. call (212) 389-2000 or email us