The news keeps getting worse for Facebook. First, the IPO didn’t do as well as expected, though it made lots of people at Facebook very wealthy. Then came news that Facebook’s underwriters (banks) had to intervene on Friday to keep the stock from falling below the $38 offering price because demand was weaker than expected.

On Monday and yesterday Facebook shares fell (well) below $38, erasing about $40 billion in market value. And today the company is being sued by shareholders for failing to disclose that Q2 revenues were going to be weaker than previously expected: $1.11 billion vs. roughly $1.17 billion estimated.

Apparently this news of weakening revenue growth was disclosed selectively to certain major, institutional investors but not universally to investors according to Business Insider. The report says that someone within Facebook told the big banks involved in the IPO to cut their earnings estimates. Apparently this is uncommon if not unprecedented during an IPO roadshow.

That news is largely what caused demand for the IPO to falter. And while the information about slowing revenue growth was obliquely disclosed in an amended S-1 filing, the information on which it was based was apparently not made universally clear to investors according to several reports.

This is the basis of the lawsuit just filed against CEO Mark Zuckerberg and the company. There are also suggestions that some SEC regulations might have been violated by this selective disclosure or non-disclosure as the case may be. Regulators are now investigating.

The fallout from the IPO “scandal” promises to be a distraction for Facebook for some time. It appears the shareholder suit may have some merit. It also appears that the stock may not yet have settled.

Welcome to life as a public company.