Nasdaq gaffes hurt prices - Facebook

Investors sued Facebook and Nasdaq OMX Group over difficulties in trading company shares on May 18. Photo / AP

Facebook, asserting a defence to lawsuits filed by investors, said Nasdaq trading errors "impaired" the pricing of shares in the social networking company's initial public offering last month.

In a request to consolidate more than 40 shareholder lawsuits in federal court in New York, the company said "trading in Facebook shares was delayed as a result of problems with Nasdaq's software systems, which impaired the orderly execution of trades and price levels".

Facebook asked a multidistrict litigation panel to assign all of the federal cases to a judge in Manhattan, including 23 that were filed in New York and four filed in California.

There are also at least 12 cases pending in state court in California, according to the filing.

Investors sued Facebook and Nasdaq OMX Group over difficulties in trading company shares on May 18, the first day they were publicly available. Some of the suits include claims that investors lost money when Nasdaq failed to process buy orders and directions to cancel orders weren't being processed.

Nasdaq has blamed poor software design for the difficulties in processing Facebook trades. Not all the complaints filed by investors claim losses were caused by Nasdaq trading errors, according to Facebook.

Another group of complaints says certain analysts revised their revenue forecasts for the company as a result of conversations with Facebook, and provided the lowered forecasts to preferred investors - not the plaintiffs,

Co-ordination of shareholder suits over the initial public offering in federal court in New York is "the best way both to streamline discovery and to eliminate the risk of inconsistent rulings on potentially critical issues", Facebook said.

- BLOOMBERG