Zynga Inc must face a lawsuit accusing the online gaming company known for "FarmVille" of defrauding shareholders about its prospects before and after its December 2011 initial public offering. Ruling 13 months after dismissing an earlier version of the lawsuit, U.S. District Judge Jeffrey White in San Francisco on Wednesday said shareholders could pursue claims that Zynga concealed declining user activity, masked how changes in a Facebook Inc platform for its games would affect demand, and inflated its 2012 revenue forecast. "Confidential witnesses all corroborate that the updates on game users and spending data was readily accessible to Zynga's management." White rejected a claim over Zynga's alleged product launch delays, saying it was mere "business puffery" for the company to call its game pipeline "strong," "robust" and "very healthy." Shareholders claimed that Zynga concealed its weaknesses to allow insiders to sell $593 million worth of stock before a post-IPO lockup was to expire, and to avoid a roughly 75 percent drop in its share price over the next four months.
via Gaming News Headlines - Yahoo! News http://ift.tt/1bxwc84
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