Facebook's bungled IPO now a distant memory as SEC drops inquiry

Fast-forwarding from a disappointing IPO in 2012 to the present, Facebook has made it up to shareholders and then some.

Facebook's stumble onto Wall Street in 2012 is now just a distant (albeit still a little stinging) memory.

Not only because the social network posted smashing quarterly earnings this week, but also because it has the SEC off its back — at least in one regard.

The US Securities and Exchange Commission is dropping its investigation into the bungled initial public offering that took place on the Nasdaq, according to a 10-Q form filed by Facebook on Thursday.

Beginning on May 22, 2012, multiple putative class actions, derivative actions, and individual actions were filed in state and federal courts in the United States and in other jurisdictions against us, our directors, and/or certain of our officers alleging violation of securities laws or breach of fiduciary duties in connection with our initial public offering (IPO) and seeking unspecified damages. We believe these lawsuits are without merit, and we intend to continue to vigorously defend them. The vast majority of the cases in the United States, along with multiple cases filed against The NASDAQ OMX Group, Inc. and The Nasdaq Stock Market LLC (collectively referred to herein as NASDAQ) alleging technical and other trading-related errors by NASDAQ in connection with our IPO, were ordered centralized for coordinated or consolidated pre-trial proceedings in the US District Court for the Southern District of New York. In a series of rulings in 2013 and 2014, the court denied our motion to dismiss the consolidated securities class action and granted our motions to dismiss the derivative actions against our directors and certain of our officers. The plaintiffs in four of these derivative actions have filed notices of appeal. In addition, the events surrounding our IPO became the subject of various state and federal government inquiries. In May 2014, the Securities and Exchange Commission (SEC) notified us that it had terminated its inquiry and that no enforcement action had been recommended by the SEC.

Facebook wasn't the only one to find itself scrutinized by the SEC in this incident.

The federal agency slapped Nasdaq with a $10 million penalty nearly a year after the IPO over poor decisions made as well as systems set up during the initial public offering and secondary trading scheme for shares of the world's largest social network.

According to the SEC at the time, it was the largest penalty ever slapped against an exchange to date.

Fast forward to the present , Facebook, at least, has made it up to shareholders and then some.

On Wednesday, the Menlo Park, Calif.-based company reported non-GAAP earnings of 42 cents per share on a revenue of $2.91 billion, a whopping increase of 61 percent from the same quarter last year.

Wall Street was expecting earnings of at least 32 cents per share on a revenue of $2.81 billion.

In the wake of crushing analyst estimates, CEO Mark Zuckerberg offered a succinct — if not humble — reflection in prepared remarks: "We had a good second quarter."

Analysts are projecting Facebook to return next quarter with revenue of approximately $3 billion.