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A lot of average Joes put on their faux-finance cap during the Facebook IPO and hoped it would get them rich. Everyone uses Facebook therefore everyone wants to buy Facebook stock, the logic went. Yeah, it didn’t work out that way. I’m sure a lot of people lost money. One poor woman, Uma Swaminathan, lost her entire life savings and kinda wants a re-do.
Uma Swaminathan, who’s a retired teacher and a widow, is trying to get restitution on the money she lost during the Facebook IPO. She had ordered her broker, Vanguard, to buy 6,200 shares of Facebook but then she changed her mind when Facebook didn’t begin trading as expected. Vanguard supposedly didn’t cancel in time and now she’s lost a good chunk of change.
Furthermore, Swaminathan has beef with Morgan Stanley too. According to Reuters:
Morgan Stanley, she said, “informed their own privileged clients” that it was downgrading its outlook on the stock, just before the IPO, and then issued more shares while raising the price “just to suck more suckers into the stock,” according to her FINRA complaint filed in July.
I’m pretty sure once the money is gone, the money is gone but Swaminathan wants £1.2 million in damages. Good luck? [Reuters via Business Insider]
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If she gets her money back then I want a little conversation with some casinos.
YOu gamble on the market like that you should expect to lose (especially when almost everyone was saying facebook would be a lame duck, markets run on confidence and there was none.)
From the details given I guess if it can be proved her brokers didn’t carry out her instructions in a timely manner she *might* be due some sort of compensation from them, but it sounds like she’s pissed off that she lost her money which is just tough luck.
How is it possible that she lost “Her Entire Life Savings”? Has Facebook stock fallen to zero? No. So she lost a chunk of money betting on something she really didn’t understand. It’s her own damn fault. Unless she can show that she gave sufficient time for he brokers to cancel the transaction and they failed to do so, In which case she has a case.
Whilst people who invested heavily in Facebook are clearly stupid I do think Facebook themselves have a lot to answer for, what they did was nothing more than a loosely disguised con they knew the numbers didn’t stack up that their profits didn’t match what they said the company was worth and were relying on naive vulnerable people to make their money. Its a bit annoying how the victim gets the blame for being stupid all the time, whilst the perpetrator laughs all the way to the bank. We don’t blame kids for taking sweets from Jimmy Saville do we, we blame Jimmy Saville !
Reading through the Reuters article, this caught my eye:
“Swaminathan said she remained “trapped” in the stock until Monday morning, when it had declined to “around $8 to $9″ per share.”
FB closed at $34/share on that Monday.
She’s just an idiot who’s trying it on.
Her $1.9 million claim includes … $1 million for “pain and suffering”
If that’s not trying it on I don’t know what is.
mmm… doesn’t explain HOW the chumpess lost her money
I don’t recall a gun being pointed to her head.
The thing is that Facebook withheld a report that showed that they had made a loss, they where required by law to publish it befor the IPO but they decided to publish it after.
The fraud case is ongoing I belive.