Zynga has won the dismissal of a lawsuit filed by company’s shareholders accusing this online gaming company of fraudulent information about financial and business prospects.
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The lawsuit consisted of 110 pages which U.S. District Judge Jeffrey White said to be “excessively long and prolix” but failed to show “relevant, basic factual details” to support its claims. The accusations against Zynga were numerous and all related to information that were allegedly kept from investors to inflate the stock price and secure the sale of $593 million worth of stock.
Zynga’s stock price plummeted since the release in December 2011 and was standing at merely $3 in August 2012, the period to which the lawsuit relates. Judge White also dismissed claims linked to a secondary stock offering, in April 2012, stating the named plaintiffs did not buy any shares in that offering. Although he gave shareholders some extra time to amend their complaint.
Joseph Tabacco, a partner at the company representing plaintiffs said that "we are confident that the case will proceed, as we believe we will more than satisfy the court's concerns when we file our amended complaint."
Mark Pincus remains as Zynga’s chairman and company has recently acquired NaturalMotion mobile gaming company from Oxford.
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