In addition, securities lawyers who represent Facebook investors say they expect hundreds of arbitration claims to be launched against brokers and securities firms that pitched the company's shares.
While investors face an uphill battle to recover losses, some legal experts said defendants in the arbitration claims and civil lawsuits face potentially large financial exposure given the stock's 47% slide since the IPO. The slump has erased about $38 billion in Facebook's stock-market value. On Tuesday, the company's shares fell 2.5%, or 51 cents, to $20.28 in Nasdaq trading.
"IPOs are the most attractive kind of suit for the plaintiff's bar," said John Coffee, a law professor at Columbia University. While at least one-third of such class-action cases are thrown out, many of the rest eventually conclude in settlements for roughly 2% to 3% of the alleged losses, he estimated.
According to Stanford University's Securities Class Action Clearinghouse, Facebook has been named as a defendant in 29 of the 53 securities class-action filings related to IPOs this year.
The bulk of the cases against Facebook and underwriters led by allege that investors weren't told clearly enough in disclosures that the social-networking firm's growth was suffering from a migration in customers to mobile devices from desktop computers. Some analysts are concerned about Facebook's advertising model for mobile devices.
Facebook and Nasdaq declined to comment.
In a securities filing, Facebook has said the lawsuits are "without merit." Just before the initial public offering, Facebook updated its stock-sale document with a warning about the mobile-device trend and its possible impact on results.
People familiar with the company's thinking say Facebook followed the securities rules mandating that certain deal-related communications be disclosed only in a deal's prospectus.
At the same time, many stock analysts covering Facebook reduced their revenue and earnings estimates for the company. That information was passed along to many large institutions—but not to many retail investors. Such information isn't required to be made public.
A Morgan Stanley spokesman said that the firm followed "all applicable regulations" with its handling of the Facebook IPO. It said that Facebook's revised prospectus filing on May 9 was "widely publicized" and that "a significant number of research analysts" reduced their earnings views to reflect the "impact of the new information."
Steven Caruso, a partner at law firm Maddox Hargett & Caruso in New York, says he is preparing to file as many as a dozen arbitration claims with the Financial Industry Regulatory Authority, representing investors who claim the deal's price was "elevated" or they "weren't given the same information."
Lawyers say some Facebook investors aren't doing anything until they know how much money will come from Nasdaq, which has admitted that technology glitches hampered investors' ability to buy and sell for a few hours on May 18. The exchange operator is willing to pay $62 million but has said it shouldn't be held responsible for all Facebook investor losses.
Last week, a judicial panel playing the role of legal traffic cop heard arguments about how and where the Facebook lawsuits should be heard in court. Legal experts say that many or all of the cases could be brought to the same court in the U.S. Southern District of New York, with the cases combined into a small group.
Among the civil suits filed so far, about 30 name Facebook as a defendant, according to the Stanford database. The rest are focused on Nasdaq, underwriters and directors, a lawyer familiar with the cases said. The Securities and Exchange Commission and state regulators are looking into how individual investors were treated in the Facebook deal.
Securities class-action suits can drag on for several years. Arbitration cases, which typically are ruled by fairness or equity issues rather than strict legal doctrines, generally appeal to investors with steeper losses.