Finra Chief Says Morgan Stanley May Face Probe Over Facebook IPO
Morgan Stanley could face regulatory scrutiny over claims that an analyst shared negative news about Facebook Inc. (FB) with institutional investors before that firm’s initial public offering last week, according to the head of the Financial Industry Regulatory Authority.
“If true, the allegations are a matter of regulatory concern” to the industry-funded brokerage watchdog and the U.S. Securities and Exchange Commission, Finra Chairman and Chief Executive Officer Richard Ketchum said today in an e-mail.
Ketchum commented in response to a news report that an analyst for Morgan Stanley, lead underwriter for the IPO, lowered a Facebook revenue forecast after the social-networking company said growth in mobile products could hurt its business. Such a move could come under scrutiny from regulators if the warning was only provided to institutional investors.
Finra’s chief didn’t say whether his Washington-based agency is investigating Morgan Stanley. (MS) John Nester, a spokesman for the SEC, declined to comment.
To contact the reporter on this story: Steven Sloan in Washington at ssloan7@bloomberg.net
To contact the editor responsible for this story: Maura Reynolds at mreynolds34@bloomberg.net
Finra Chief Says Morgan Stanley May Face Probe
Victor J. Blue/Bloomberg
The New York headquarters of Morgan Stanley, lead underwriter for Facebook Inc.'s IPO.
The New York headquarters of Morgan Stanley, lead underwriter for Facebook Inc.'s IPO. Photographer: Victor J. Blue/Bloomberg
May 22 (Bloomberg) -- Jeff Corbin, chief executive officer of KCSA Strategic Communications, talks about the 19 percent decline in Facebook Inc.'s shares following the company's initial public offering. Corbin speaks with Mark Crumpton on Bloomberg Television's "Bottom Line." (Source: Bloomberg)
May 22 (Bloomberg) -- Brian Wieser, an analyst at Pivotal Research Group, talks about Facebook Inc.'s valuation and the outlook for the company's shares. Wieser speaks with Betty Liu on Bloomberg Television’s “In the Loop.” (Source: Bloomberg)
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