Morgan Stanley agreed to pay a $5 million fine to settle charges that it gave information to research analysts that was not available to all investors in Facebook Inc.’s initial public offering. Morgan Stanley, which was the lead underwriter, neither confirmed nor denied the accusations.
This settlement has no bearing on any action the U.S. Securities and Exchange Commission may or may not take regarding the IPO.
Morgan Stanley is accused of profiting from “an unlevel playing field” by its selective disclosure of financial information.
Secretary of the Commonwealth of Massachusetts William Galvin said that “retail investors were left to interpret vague qualitative information” while Morgan Stanley’s analysts were given the specific numbers upon which they lowered their estimates. Galvin said this activity was dishonest and unethical, and that it demonstrated how institutional investors have an unfair advantage over others
Morgan Stanley – http://www.morganstanley.com
Secretary of the Commonwealth of Massachusetts – Consent Order
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