Angry shareholders are suing Facebook and co-founder Mark Zuckerberg, accusing them and the company's underwriters of hiding the truth about future growth forecasts.
It has emerged that only a select group of insiders were aware that Facebook was forecast to earn tens of millions of dollars less than had been publicly stated.
The class action lawsuit alleges that Facebook and its underwriters concealed "a severe and pronounced reduction" in revenue growth forecasts in the run up to the IPO.
A separate suit filed in California by investor Darryl Lazar claims that the social network's share prospectus contained "materially false and misleading statements", according to the Guardian.
This meant that ordinary investors were unaware of how the company's performance was stalling and that they were potentially paying too much for shares at the flotation price of $38.
After trade opened on Friday, the share price fell dramatically on Monday and Tuesday to close at $31, but opened slightly up at $31.42 on Wednesday. On Thursday, shares were trading around $32.
The shareholder lawsuit comes as US authorities open an investigation into possible securities fraud by the bank that led the IPO, Morgan Stanley, which is accused of failing to warn smaller investors of a more negative assessment of Facebook's future profits.
It is claimed that several major investors had been pre-warned that Morgan Stanley analyst Scott Devitt had cut the amount of money he expected Facebook to make, according to the Telegraph.
Devitt cut his estimate to $4.85bn from an estimate of more than $5bn, and he claimed that growth in revenues could be hit by the increase in the use of mobile devices access Facebook.
"The allegations, if true, are a matter of regulatory concern," said Rick Ketchum, the head of the US Financial Industry Regulatory Authority.
But Morgan Stanley said IPO procedures used were “in compliance with all applicable regulations” and pointed to the fact that a "significant number" of analysts had reduced their earnings views in response to Facebook's revised IPO filing on 9 May.
Facebook said: "The lawsuit is without merit and we will defend ourselves vigorously."