According to a report on Bloomberg, the social gaming company Zynga was sued by a shareholder for allowing executives to sell shared early while the sales by lower level employees and outsiders were blocked. The lawsuit alleges that executives who took part in the sale “nearly doubled the proceeds from their [stock],” before the normal lockup period.
The company have its IPO on December 11th, while the sale took place in the month of March 2012, results in which a total of 165 days lockup period would have expired on May 24, 2012, allowing executives to sell their stock up to over 2 months earlier.
A former Zynga product manager, Wendy Lee told Delaware Chancery Court complaint made public today in Wilmington that the “lockup” was waived following March for some executives, who has sold over 40 million shares in a secondary offering.
(Image Credit / Source: Flickr / 瞄瞄)