Mark Zuckerberg is reportedly being sued by his own investors.
The most recent lawsuit claims that the Facebook co-founder sold more than $1 billion worth of the company's shares just before prices started tumbling, according to TMZ.
Disgruntled Facebook shareholders are also claiming that the 28-year-old CEO knew the stock was overvalued and dumped his own shares to avoid continued losses.
At the center of the plaintiffs complaint is an accusation that says Zuckerberg and Facebook knew there was not enough advertising revenue to support a $38 stock valuation, but hid that revenue information to push up the share price for the social networks initial public offering.
The lawsuit, filed on June 3, in the U.S. District Court in Manhattan, includes Goldman Sachs, JP Morgan and Morgan Stanley. It suggests the banks pointed out the flaw in Facebook's IPO, but that the social network chose to share that information with only its largest investors through selective disclosure methods, The Daily Mail reports.
The suit makes further claims that the defendants secretly told certain preferred investors they had concerns -- enabling them to avoid buying or to sell quickly at a good price immediately after the initial public offering.
As details on the situation have yet to emerge, Zuckerberg could potenttially be found guilty of insider trading if it is revealed that he did in fact use information at his disposal and share that information only with select groups of investors.
Zuckerberg became one of the richest people in the world at the age of 28 when Facebook recently went public, but shares in the company -- which were once valued at $104 billion -- tumbled from a peak of $38 to $26 per share in the week following Facebook's IPO debut.
While the CEO of the Menlo Park, Calif. based company has been seen enjoying his honeymoon with his new wife Priscilla Chan, Zuckerberg has yet to comment on claims that he knew of IPO price concerns before selling off his shares.
My name is Carey Vanderborg and I'm a journalist working in New York City. I love food, travel, craft beer, live music and writing about all of the above.