Zynga’s stock crashed stupendously a few days ago, but the bad news is just beginning for the social media game giant. Lawyers are now investigating the company for possible insider stock trading three months before it crashed, which is a violation of various federal laws and regulations.

The law firms involved now include Schubert Jonckheer & Kolbe, Johnson & Weaver, Wohl & Fruchter, Levi & Korsinsky, and Newman Ferrara. The firms will be investigating whether or not Zynga’s insiders, including the CEO of the company Mark Pincus, know what was on the horizon when they sold off large amounts of shares back in April.

The firm Levi & Korsinsky, in particular, is investigating “concerns that Zynga misrepresented and/or failed to disclose materially adverse facts about its business and financial condition.” These firms are experienced in class-action lawsuits against large corporations like Zynga, with victories in the past against the likes of THQ, EA, and even Sony.

Zynga’s shares have dropped to record lows, and this has led to plenty of rumors and speculation that the heads of the company did what they did because they knew the true state of the company and that this was going to eventually happen. However, these executives still own plenty of shares and are still feeling the burn. Is Zynga’s business plan finally falling apart? It’s only matter of time until we find out.

Source: Kotaku

About Yomaru

[Managing Editor] I love video games and have been playing since the SNES days. My favorite titles include Metroid II, BioShock, Resident Evil 4 and Left 4 Dead. I'm an avid internet junkie and gifted in the ways of computers, but don't ask me to fix yours. Also a big fan of indie movies and anime.