Mark Zuckerberg is being sued, along with his company Facebook and CFO, David Wehner, according to reports from Reuters. As Crypto Disrupt announced on Thursday, traditional fiat investors were left reeling following a recent 19% fall in the stock price of the social media giant. The first rule of investing, be it fiat or crypto, is don’t invest more than you can afford to lose. Facebook shareholder, James Kacouris, was shocked when the “true” performance of the company was revealed in a trading update on Wednesday.
A class action lawsuit has been filed in Manhattan for undisclosed sums on the basis of “federal securities law violations”.
- David M. Wehner, Facebook Chief Financial Officer
- Mark E. Zuckerberg, Facebook CEO
- Facebook Inc
The reason Zuckerberg is being sued
SEC and NASDAQ rules mean fiat investors shouldn’t be too shocked by trading updates as company Executives are expected to provide data on an ongoing basis if they are going to under or over perform based on earlier trading updates. The myriad of reporting documents required from Listed companies is to try and prevent fiat investors from losing their shirt due to a sudden fall in the stock price of a company.
Facebook holds one of the world’s largest databases covering precise details for their billions of users and the revenue each one provides to the business. With such an impressive database Facebook is expected to know, with precise accuracy, the future earnings for each trading period. The lawsuit suggests important data was being withheld from the fiat investors and the courts will now have to decide if this violated securities law.
Fiat has more problems than crypto
During 2018 quite a few high profile Executives have left the fiat FinTech and social media sectors and moved into blockchain businesses as they see a demise for the old guard. As Zuckerberg is being sued, he might currently be shunned by the crypto community. If he is found not guilty, then there is probably a blockchain startup that would be interested in receiving his CV.
This lawsuit demonstrates that fiat investment can be just as risky as crypto even with all the SEC control that has been introduced in the last few decades. Drugs on the street are purchased with fiat, and most hitmen still work on a “cash only” basis.
Financial analyst, smartphone app designer, technical writer, and crypto enthusiast. Blockchain verified graduate of MOOC 9, DFIN-511: Introduction to Digital Currencies, run by the University of Nicosia.