Class Action Suit Against Facebook Accuses Company Of Hiding Concerns About Growth Forecasts

Shares of Facebook Inc (NASDAQ: FB) were trading lower by 0.35 percent early Wednesday morning as reports of a class action suit against the company began surfacing on Tuesday.

According to Fortune, a U.S. federal judge certified two shareholder class action suits against Facebook which allege the company was hiding concerns about its growth forecasts prior to Facebook's May 2012 IPO.

Fortune's report noted that retail and institutional investors who claimed to have lost money from buying shares of Facebook at inflated prices could pursue their claims as groups.

Fortune added that shareholders are accusing Facebook of "concealing internal projections prior to its IPO of how growth in mobile devices, an area in which it generated little ad revenue, might hurt its prospects, even as it quietly warned underwriters to cut their forecasts."

The judge's decision is dated December 11 but remained under seal until Tuesday.

Defendants also include Facebook's Chief Executive Officer Mark Zuckerberg, Chief Operating Officer Sheryl Sandberg, as well as other top officials.

Facebook is appealing the class certifications which the company claims are "without merit" and also conflict with "well-settled" precedent.