American financial regulators are to investigate whether selected clients of the investment bank which advised Facebook in the run-up to its public share offering last week were sent details of a negative analyst's report into the prospects for the sale ahead of the shares going on sale.
Morgan Stanley has strongly denied that it broke any rules, despite the leading securities regulator for the state of Massachusetts, William Galvin, issuing a subpoena against the merchant bank, and the head of the US' Financial Industry Regulatory Authority, Rick Ketchum, stating that the reports were "a matter of regulatory concern".
He added that his staff were investigating whether Morgan Stanley told selected clients that revenue estimates for Facebook had been cut by a leading analyst just before the shares went on public sale last Friday.
But the bank issued a statement yesterday, saying its actions complied with regulations, and that it "followed the same procedures for the Facebook offering that it follows for all IPOs [initial public share offerings]".
Reuters news agency has meanwhile discovered that technical problems at the New York stock exchange led to the shares' trading debut being delayed for more than half an hour. It added that some brokers were still dealing with the consequences of the difficulties as late as yesterday.
