Facebook CEO Mark Zuckerberg and dozens of banks involved in its IPO face a lawsuit that accuses them of misleading investors about its financial health ahead of the May 2012 listing.

In a decision released Wednesday, U.S. District Judge Robert Sweet in Manhattan said investors could pursue claims that Facebook omitted material information from its registration statement.

Sweet also has ruled that investors can sue the Nasdaq exchange over the technology problems that led to difficulties during Facebook's first day of trading.

In the lawsuit against Zuckerberg and the social media firm's underwriters, investors claim that Facebook should have disclosed internal projects about how increased mobile usage might reduce future revenues.

Facebook was $38 US a share in May 2012, with technology problems causing trading to halt during its first day on the Nasdaq.

It was more than a year – July 31, 2013 – before the shares traded above the $38 listing price. The stock took a beating early in the year, as it became clear that it could not recoup as much money from mobile ad revenue as it could from online ads.

Facebook started showing mobile advertisements in early 2012 and focused its strategy on building mobile use.

The Menlo Park, Calif.-based company showed vastly improved growth in its mobile revenue in the second quarter of 2013, after discovering that selling more, cheaper ads was a winning formula. It also boosted its international ad budget.

But it remains second place to Google, which dominates the mobile ad market. 

With files from Reuters