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Facebook IPO scrutiny builds

6:02 AM, May 23, 2012   |    comments
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MARCY GORDON
AP Business Writer

WASHINGTON (AP) - Regulators are examining whether Morgan Stanley, the investment bank that shepherded Facebook through its highly publicized stock offering last week, selectively informed clients of an analyst's negative report about the company before the stock started trading.

The Financial Industry Regulatory Authority, the self-policing body for the securities industry, says that the question is a matter of regulatory concern for the organization and the Securities and Exchange Commission.

The top securities regulator for Massachusetts, William Galvin, says he has subpoenaed Morgan Stanley. Galvin's office is investigating whether Morgan Stanley divulged to only some clients that one of its analysts had cut his revenue estimate for Facebook before the stock hit the market on Friday.

The bank said on Tuesday said that its procedures complied with regulations.

(Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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