A judge has ruled that a lawsuit against the founder of Zynga, Mark Pincus, over his sale of $192 million of the company’s stock back in 2012 can stand.
The plaintiff Wendy Lee has accused Pincus of getting an unfair advantage in the sale of the company’s stock. He, along with the other defendants in the suit, was originally barred from selling any stock acquired before Zynga’s IPO until May 28, 2012. But Pincus and four other directors were granted an exemption which allowed them to sell stock two months earlier.
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The defendants in the suit had asked the Delaware Court of Chancery to dismiss the lawsuit, but their motion was denied by the court.
“It is reasonably conceivable that the benefit the director defendants received in the lockup restructuring was not entirely fair, ” Judge Andre Bouchard wrote in a 35-page ruling.
Neither side in the lawsuit commented on the court’s ruling.
On Monday, Zynga shares closed down 0.72% at $2.75, and year to date stock is down over 27%.
