{"id":30457,"date":"2015-08-11T11:43:26","date_gmt":"2015-08-11T18:43:26","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=30457"},"modified":"2015-08-11T12:07:47","modified_gmt":"2015-08-11T19:07:47","slug":"zynga-to-pay-23m-to-allegedly-defrauded-shareholders","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/zynga-to-pay-23m-to-allegedly-defrauded-shareholders\/","title":{"rendered":"Zynga to Pay $23M to Allegedly Defrauded Shareholders in Settlement"},"content":{"rendered":"
\"Zynga
Zynga was accused of \u201cbusiness puffery\u201d by a judge in allegedly misrepresenting its revenue forecasts prior to its 2011 IPO. The company is now paying out $23 million in damages to shareholders. (Image: venturebeat.com)<\/figcaption><\/figure>\n

Zynga<\/a> will make a settlement for $23 million with a group of shareholders who have alleged they were deliberately defrauded by the social gaming giant.<\/p>\n

A lawsuit brought against Zynga claimed that the company deliberately hid a drop in user activity from shareholders prior to its IPO back in late 2011 and that it willfully inflated its revenue forecasts.<\/p>\n

It was also accused of concealing the fact that it knew that forthcoming changes to the Facebook<\/a> platform would likely have a detrimental effect on demand for its games, although Zynga has argued persistently that it was not permitted to share Facebook\u2019s future plans with the public.<\/p>\n

A change in Facebook\u2019s policy that was eventually implemented in 2012 meant that Zynga games were no longer able to share automatic progress updates (those annoying updates that told you how a fellow Facebooker was doing level-wise in a specific game), meaning that fewer Facebook users would receive exposure to the games.<\/p>\n

Shares Plummet<\/h2>\n

The lawsuit was initially dismissed by a US District Court in 2014, but an amended complaint was upheld by the same court in March this year. In allowing the case to proceed, Judge Jeffrey White noted that Zynga \u201cobsessively tracked bookings and game-operating metrics on an ongoing, real-time basis with regular updates on the activity and purchases by every user of every Zynga game,” adding that new witnesses corroborated the plaintiffs\u2019 allegations that the Zynga management knew revenues were likely to fall.<\/p>\n

The judge accused the company of \u201cbusiness puffery\u201d for referring to its game pipeline as “strong,” “robust” and “very healthy” in the lead up to the IPO.<\/p><\/blockquote>\n

Zynga\u2019s share prices plummeted from $15.91 to less than $3 between their March 2012 peak and the following July, after the company did eventually publish figures that were below expectation.<\/p>\n

Second Lawsuit Ongoing<\/h2>\n

Zynga is facing a second lawsuit, brought by shareholder and former employee Wendy Lee, which specifically names Zynga CEO Mark Pincus and other directors, alleging they sold their shares when the stock price was near its highest, fully aware that it was likely to be downhill from there. Pincus is alleged to have made $192 million from the transaction.<\/p>\n

The company said this week that in the case of Zynga v Lee it had \u201cmeritorious defenses,\u201d and as such would defend itself vigorously.<\/p>\n","protected":false},"excerpt":{"rendered":"

Zynga will make a settlement for $23 million with a group of shareholders who have alleged they were deliberately defrauded by the social gaming giant. A lawsuit brought against Zynga claimed that the company deliberately hid a drop in user activity from shareholders prior to its IPO back in late 2011 and that it willfully […]<\/p>\n","protected":false},"author":42,"featured_media":30469,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21,10,19,13],"tags":[],"acf":[],"yoast_head":"\nZynga to Pay $23M to Allegedly Defrauded Shareholders in Settlement<\/title>\n<meta name=\"description\" content=\"Zynga, the social gaming giant, allegedly lied about its revenue projections and is forced to settle with shareholders.\" \/>\n<meta name=\"robots\" content=\"noindex, follow\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Zynga to Pay $23M to Allegedly Defrauded Shareholders in Settlement\" \/>\n<meta property=\"og:description\" content=\"Zynga, the social gaming giant, allegedly lied about its revenue projections and is forced to settle with shareholders.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/zynga-to-pay-23m-to-allegedly-defrauded-shareholders\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2015-08-11T18:43:26+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2015-08-11T19:07:47+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2015\/08\/Zynga-pays-shareholders-23-million.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"780\" \/>\n\t<meta property=\"og:image:height\" content=\"494\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Casino.org Staff Writer\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Casino.org Staff Writer\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/zynga-to-pay-23m-to-allegedly-defrauded-shareholders\/\",\"url\":\"https:\/\/www.casino.org\/news\/zynga-to-pay-23m-to-allegedly-defrauded-shareholders\/\",\"name\":\"Zynga to Pay $23M to Allegedly Defrauded Shareholders in Settlement\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/zynga-to-pay-23m-to-allegedly-defrauded-shareholders\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/zynga-to-pay-23m-to-allegedly-defrauded-shareholders\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2015\/08\/Zynga-pays-shareholders-23-million.jpg\",\"datePublished\":\"2015-08-11T18:43:26+00:00\",\"dateModified\":\"2015-08-11T19:07:47+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/8c48bf89dc86da77b4d856c7b3b78d77\"},\"description\":\"Zynga, the social gaming giant, allegedly lied about its revenue projections and is forced to settle with shareholders.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/zynga-to-pay-23m-to-allegedly-defrauded-shareholders\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/zynga-to-pay-23m-to-allegedly-defrauded-shareholders\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/zynga-to-pay-23m-to-allegedly-defrauded-shareholders\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2015\/08\/Zynga-pays-shareholders-23-million.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2015\/08\/Zynga-pays-shareholders-23-million.jpg\",\"width\":780,\"height\":494,\"caption\":\"Zynga was accused of \u201cbusiness puffery\u201d by a judge in misrepresenting its revenue forecasts prior to its 2011 IPO. 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