An IPO that should have made Morgan Stanley the envy of all
its Wall Street competitors is turning into a bit of a mess, according to Forbes.
It wasn’t long ago when Morgan Stanley was named lead
underwriter in the Facebook IPO, and many called it a blow for rival Goldman
Sachs. Days after the hyped IPO though Morgan Stanley is feeling the heat as
Facebook shares get pummeled and regulators begin asking the firm questions.
Today there’s news that the investment bank has been issued
a subpoena by Massachusetts Secretary of Commonwealth William Galvin. That
comes after reports that Morgan Stanley and other underwriters cut their
outlooks for Facebook’s revenue growth during the IPO roadshow. As my colleague
Steve Schaefer points out that could be bad news for Morgan if the information
was only shared with certain clients.
A spokesperson for Galvin told Reuters, “The Securities
Division has put out a subpoena to Morgan Stanley in connection with the
analyst’s discussion with certain institutional investors about the revenue
prospects for Facebook….”
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