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Facebook, Zuckerberg Sued Over IPO
mrquagmire writes with this snippet from CNET: "Facebook shareholders have sued the social network, CEO Mark Zuckerberg, and a number of banks, alleging that crucial information was concealed ahead of Facebook's IPO. The lawsuit, filed in the U.S. District Court in Manhattan this morning, charges the defendants with failing to disclose in the critical days leading up to Friday's initial public offering 'a severe and pronounced reduction' in forecasts for Facebook's revenue growth, as users more and more access Facebook through mobile devices, according to Reuters, which cited a law firm for the plaintiffs."
The suit alleges that only big time investors were apprised that rising use of mobile would affect revenue. This was known to everyone weeks ago, well before the IPO. here's an article from a week prior to the IPO all about the mobile risks
http://www.telegraph.co.uk/technology/facebook/9257232/Facebook-issues-revenue-warning-over-mobile-growth.html
A) Saverin hasn't been involved in the running of facebook in years, and certainly had nothing to do with the IPO, so he will not be the target of this lawsuit in any way.
B) He did give up his citizenship for tax reasons, but not the tax reasons everyone thinks. He cannot and will not escape any taxes on money he made from the IPO, he earned those shares when he was a US citizen and will pay full taxes on them. He renounced his citizenship because he hasn't lived in the US in 4 years and was tired of paying taxes to the US for money he was making working in Singapore, which isn't that unreasonable.
She's of Chinese descent, and was born in Massachusetts and grew up around Boston. Nothing Indian about her.
Except in this case, some of the analysts were revising down their numbers just before the IPO, and there is some suspicion that the institutional investors got told one thing, and the rest of the plebes got told something else.
Sorry, but that's a violation of SEC laws, and possibly fraud. This is a little more than caveat emptor, this is failing to live up to the legal responsibilities imposed by the SEC.
Yes, the stock seemed over-valued from the get go, but there was information that it was even worse than what had been disclosed publicly. That part is illegal.
This is one of those things that serves to reinforce my belief that much of the market is a Ponzi scheme, and that an IPO is a good way to fleece investors as the big guys take their cut and then get out of it.
Lost at C:>. Found at C.
He renounced his citizenship because he hasn't lived in the US in 4 years and was tired of paying taxes to the US for money he was making working in Singapore, which isn't that unreasonable.
The USA is actually the only first world country that even taxes their people while they are living overseas. For example in my country you don't need to pay any taxes back home if you live in another country for more than 6 months.
You're going to need to back that one up. I believe Canada does the same thing.
If there's two there's probably three.
So I'm afraid I don't think what you say is true.
Lost at C:>. Found at C.
Nope, I'm a Canadian who moved to the US. I had to do dual income taxes the first year because I spent a partial year in both countries. After that, it was only US taxes. If I were to actually make income in Canada then it would be a different story, I believe, but I can make as much as I want in the US and not pay income tax to Canada.
In canada we do not no.
You have to pay taxes on overseas income if you are canadian resident, and you have to specially disclose if you have foreign assets over 100k or some number around there. If you are a non resident in canada you still have to file income taxes on income earned in canada, which can then be dealt with through the ungodly myriad of tax treaties.
However, if you are *living* out of canada for more than 6 months you are no longer a resident, and do not pay taxes. You also are not automatically covered for health insurance.
*liviing* is important. You can spend 6 months out of canada and still be considered living in canada if you don't have a residence out of the country, and meet the criteria for strong ties within canada (and don't spend 6 months outside of canada in the same place I would presume).
As far as I know the only two countries in the world with citizenship tax are eretria and the US. (http://renunciationguide.com/Citizenship-Based-Taxation-International-Comparison.html) Although I grant that that source is a bit sketchy. Wikipedia says the same thing (that the source is sketchy and quotes the same information).
You're going to need to back that one up. I believe Canada does the same thing.
False. Canada taxes its residents. Canada does not tax its citizens, unless they are also residents of Canada.
Read the explanation from the Canada Revenue Agency:
http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/rsdncy-eng.html
If you want a more detailed explanation of how your residence is determined for tax reasons, you should read Interpretation Bulletin IT-221, Determination of an Individual's Residence Status:
http://www.cra-arc.gc.ca/E/pub/tp/it221r3-consolid/it221r3-consolid-e.html
So I'm afraid I don't think what you say is true.
ME TOO!!!
Not quite that simple. The complaint is that revenue projections were selectively disclosed to insiders. That is a violation of SEC regulations.
You are correct. IF inside information was tipped and not properly released then there is a serious legal problem for some folks here. One cannot trade on inside (not public) information no matter what the source, no matter what the company.
My guess here is some green horn insider at Facebook spilled the beans by passing improperly vetted inside information to a select few. This tipped off the underwriters, who then traded the stock to their advantage. There will be two issues for the legal system to sort out. First, if anybody broke the insider trading laws (like Martha Stewart did) by tipping or receiving inside information and trading. Both the tipper and the one being tipped are subject to criminal prosecution for violating SEC rules so there could be a bunch of folks at risk here. Second there will be the civil case of the investors who traded without having the same access to information as others. They will claim that Facebook improperly handled inside information and should pay their losses.
Both cases seem to have merit.
"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
Facebook also filed an ammended S-1 with the SEC:
http://www.sec.gov/Archives/edgar/data/1326801/000119312512222368/d287954ds1a.htm
That says right in it:
"Our business is subject to numerous risks described in the section entitled “Risk Factors” and elsewhere in this prospectus. You should carefully consider these risks before making an investment. Some of these risks include: ... Growth in use of Facebook through our mobile products, where our ability to monetize is unproven, as a substitute for use on personal computers may negatively affect our revenue and financial results; "
This was reported on by major financial news sources almost two weeks before the IPO:
http://blogs.ft.com/tech-blog/2012/05/facebook-admits-to-mobile-weakness/#axzz1viB00j8h
http://articles.businessinsider.com/2012-05-07/tech/31602869_1_zynga-facebook-linkedin
This information was freely available to anyone who was paying attention. They're trying to blame Facebook for their own failure to do even basic due dilligence.
Here's a reference. Only the US and Eritrea are this dumb.
I've lived abroad for more that 20 years, and I am very tired of filing an ever-increasing number of forms with the US authorities. It's not only the IRS, you also have to file separate forms with a separate agency detailing your foreign bank accounts - which, frankly, is none of their business.
The US does allow a deduction against foreign income, but this is worth less and less as the value of the dollar continues to crash. Depends what currency your country uses, of course, but the US doesn't care or make any allowance for that. In my case, the dollar has lost fully half of its value in the last few years. Turn that around: from the IRS point of view my salary has doubled (even though it actually hasn't). Great.
Add to that the pressure the US is applying to foreign banks, in an attempt to rake in money. I won't go into details here, but the US behavior here is closer to blackmail than to any sort of legal proceeding. The result is that foreign banks now ask you up front "are you subject to US taxes?" If you answer "yes", many simply refuse to do business with you. The US government is making it difficult for normal Americans to get on with their lives.
I have also had enough. I will be renouncing my citizenship before the year is out.
Enjoy life! This is not a dress rehearsal.