Facebook's legal blame game

Who is to blame in the Facebook IPO fiasco?

Lots of litigation is assured, and all aggrieved parties will seek restitution. The blame game has begun in earnest. Facebook certainly has some blood on its hands, if you ask the many shareholders who have filed suit already.

The latest development, according to DealBook, is that "the social network is set to file a motion to consolidate all the shareholder lawsuits against the company, according to a person with knowledge of the matter, who requested anonymity because the document was still private. The lead underwriters, Morgan Stanley, Goldman Sachs and JPMorgan Chase, are expected to join the motion, which could be filed in the Federal District Court for the Southern District of New York as early as Friday. The motion will represent the first time Facebook has publicly addressed the lawsuits and the performance of its highly anticipated, but ultimately lackluster, I.P.O. on May 18. While the document is expected to be relatively thin on detail, it will provide some perspective on Nasdaq's role on listing day and the effect its actions had on the stock's trading activity."

And here's the point: "Facebook is expected to place some blame on Nasdaq."

The exchange company would appear to be an obvious scapegoat on any trading-related issues, but it's confident that it will not be held liable. Nasdaq OMX CEO Robert Greifeld has been making clear that the exchange is protected by its member contracts and it status as an SRO. He says that the company has never been successfully sued for a trading error. That won't stop people from trying to make history.

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