Exclusive: Snap reveals US subquotas on IPO disclosures

NEW YORK (Reuters) – The US Department of Justice and the Securities and Exchange Commission have received Snap Inc ( SNAP.N ) for information on its first public offer in March 2017, the social media program maker told Reuters on Tuesday .

A man takes a picture of the front page of the New York Stock Exchange (NYSE) with a Snap Inc. logo that is on the front of the company's briefing in New York, USA, March 2, 201[ads1]7. REUTERS / Lucas Jackson

Snap said in a statement that it has responded to the government's unemployment benefits and other requests for information.

The previously unreported federal inquiries follow an ongoing shareholder procedure where investors claim that Snap misled the public about how the competition from Facebook Incs ( FB.O ) Instagram service had affected the company's growth.

Snap said that it believes that the federal regulators "investigate issues related to the previously described claims that were conveyed in the class action on our IPO information."

It continued: "While we are not fully aware of these surveys, our understanding is that DOJ is probably focused on IPO information related to Instagram competition."

Snaps Snapchat message app has struggled with user growth since IPO, and despite the expected sales volume and reduced losses, the shares have tumbled. They closed at $ 6.71 on Tuesday, down from their original offer price of $ 17.

The company described lawsuit as "meritless" and pre-IPO information as "accurate and complete." It said that it would continue to cooperate with the SEC and the Ministry of Justice.

Snap recognized probes after the US government made a sealed application in the lawsuit last Wednesday.

The case filed in May 2017 at the United States District Court in Los Angeles also claims that Snap did not reveal a sealed suit before IPO, where a former employee claimed that the company had misrepresentated some user statistics.

Judge Stephen V. Wilson in June denied Snaps motion to reject the case.

Reporting by Alison Frankel in New York; Additional Reporting by Paresh Dave in San Francisco; Editing Cynthia Osterman

Our Standards: Thomson Reuters Trust Principles.

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