More Turmoil at Zynga
The last week has been anything but fun and games for Zynga.
A week ago, the online game publisher released a dismal earnings report that prompted the share price to plummet 39% the following day.
Investors are now suing, VentureBeat reports, after having discovered that company executives had cashed out their stock three months earlier.
San Francisco-based law firm Kessler Topaz Meltzer & Check filed a class action on Monday alleging certain executives and investors at the social gaming company engaged in insider trading. On Tuesday, Robbins Geller Rudman & Dowd of San Diego filed a similar class action, claiming Zynga "issued false and misleading statements regarding Zynga's business and prospects" when it registered for its IPO, and "as a result of [Zynga's] false statements, Zynga stock traded at an artificially inflated prices during the Class Period."
Five other law firms have also filed complaints against Zynga, according to VentureBeat.
Now comes word of a shakeup in Zynga's executive ranks. Chief operating officer John Schappert loses a couple of key direct reports, who will now report directly to the CEO, and will no longer oversee game development, according to Bloomberg.
The demotion adds insult to injury for Schappert, who was named as a defendant in several class action suits for selling $3.9 million worth of Zynga stock before the share price crashed, VentureBeat reports.
In the time since the top-level executives sold their stock, Zynga's stock value has decreased by more than 75%, the Wall Street Journal notes.