Catastrophe for Facebook, Wall Street, Investors: SEC and FINRA Plan Investigation of Facebook IPO

Posted by Techvibes NewsDesk

The Financial Industry Regulatory Authority's chairman told Reuters today that regulators plan to review allegations that underwriter Morgan Stanley shared negative news before Facebook's hotly anticipared initial public offering last week with institutional investors.

"The allegations, if true, are a matter of regulatory concern," Richard Ketchum is quoted as saying.

This morning, Business Insider's Henry Blodget penned a lenghty piece outlining the magnitude—and rarity—of this potential calamity. Noting that he's never seen this happen in 20 years in the business, Henry understated that this is a "huge problem"—for the banks, for Facebook, and for the myriad retail investors who were suckered (or "Zuckered") into purchasing IPO shares for $38 apiece.

FB shares were down 4% before the news, and have since sunk even further to 8%.

Company:
Facebook
Website:
http://www.facebook.com
Location:
Toronto, Ontario, Canada

Facebook's mission is to give people the power to share and make the world more open and connected. Millions of people use Facebook everyday to keep up with friends, upload an unlimited number of photos, share links and videos, and learn more about the people they meet. more


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Techvibes NewsDesk

Techvibes NewsDesk

Techvibes is Canada's leading technology media property.Founded in 2002, Techvibes covers technology and business news that impacts Canadians. We combine breaking local news with international coverage to deliver a unique balance of insight and information. The Techvibes Newsdesk covers a broad beat and publishes general news stories. If you have a story you would like covered, email... more



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