Senate Banking panel reviewing Facebook IPO issues (UPDATE)

The U.S. Senate Banking Committee is reviewing “issues raised in the news” regarding Facebook’s botched initial public offering, a Democratic Senate Banking aide said on Wednesday.

The review is not considered a formal investigation at this point, but entails briefings among the committee staff and regulators, Facebook and other stakeholders.

The announcement by the committee comes on the heels of reports by Reuters that an analyst for lead underwriter Morgan Stanley cut his revenue forecasts for Facebook in the days before the offering. That information was not disclosed to the market before the stock was listed.

The IPO also suffered setbacks following a technology glitch on the Nasdaq exchange, and staff at the Securities and Exchange Commission are reviewing the incident.

The Senate Banking aide did not provide details about what issues the committee planned to explore, but its plans to review the matter adds to mounting pressure on Facebook, Morgan Stanley and Nasdaq.

On Tuesday, two top U.S. financial market regulators both said they would explore the circumstances surrounding Facebook’s IPO.

Richard Ketchum, the head of Financial Industry Regulatory Authority, said he was concerned about whether or not there was selective disclosure about the negative forecast to investors.

SEC Chairman Mary Schapiro also said her agency wanted to explore “issues” surrounding the Facebook IPO as well, but she did not provide any specifics.

Morgan Stanley has previously said it has complied with all of the applicable regulations.

Meanwhile, Massachusetts state securities regulators have already issued a subpoena to Morgan Stanley seeking information about its analyst’s discussions with investors about Facebook.

Facebook Inc, Chief Executive Mark Zuckerberg, and several banks led by Morgan Stanley were sued by shareholders, who claimed the defendants hid the social networking leader’s weakened growth forecasts ahead of its $16 billion initial public offering.

The defendants were accused of concealing from investors during the IPO marketing process “a severe and pronounced reduction” in Facebook revenue growth forecasts, resulting from increased use of its app or website through mobile devices.

The lawsuit was filed in the U.S. District Court in Manhattan, according to a lawyer for the plaintiff.