Senate Banking panel reviewing Facebook IPO issues (UPDATE)

The Facebook logo is seen on a screen inside at the Nasdaq Marketsite in New York.

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.


News
Entertainment
Sports
Lifestyle
International

PHOTOS: Places to visit on Shakespeare's 450th birthday

William Shakespeare would celebrate his 450th birthday on Wednesday, and England's greatest playwright let his imagination roam as widely as his characters.

National

Train selfie star who got kicked in the…

  A 22-year-old Canadian man who posted a video of himself getting kicked in the head by a train conductor is set to cash in…

National

Call of Duty hoaxer blamed for $100K SWAT…

A heavilly-armed SWAT team and an army of police officers stormed a Long Island home fearing a grisly double homicide – only to find it…

National

Minnie Driver tweets naked celebrity snap to 'shut…

Actress Minnie Driver has responded to bitchy critics who sniped about her bikini body by Tweeting a naked picture of herself. The 44-year-old star of…

Movies

Review: 'The Railway Man' is a literal-minded look…

In "The Railway Man," Colin Firth plays a WWII vet suffering from massive trauma acquired from his days as a beaten POW.

Books

'#GIRLBOSS': Nasty Gal CEO shares unlikely success story

Nasty Gal CEO Sophia Amoruso shares her rags to riches, dumpster to Porsche tale in her new book "#GIRLBOSS."

Movies

App Appeal: Unf— Your Habitat is a sweary…

Guilt trip yourself into some spring cleaning with the app "Unf— Your Habitat," which uses swearing and some rudeness to get you to get your s— together.

Movies

Review: 'The Other Woman' needs to be angrier,…

Cameron Diaz, Leslie Mann and Kate Upton play women who team up to destroy the man they're all unwittingly sleeping with in "The Other Woman."

MLB

MLB Power Rankings: Brewers best in baseball, Dodgers,…

MLB Power Rankings: Brewers best in baseball, Dodgers, Cardinals, Yankees surge. The A's, Braves, Rangers, Giants and Rockies are also in the top 10.

NBA

Breaking down the Sixers top draft options

With the NBA Playoffs now in full force, there’s only one thing on the mind of Sixers fans at the moment -- the 2014 NBA Draft Lottery.

MLB

Metro one-on-one: Q&A with Phillies centerfielder Ben Revere

Charlie Manuel used to say that the Phillies go as Jimmy Rollins goes. Well, Ryne Sandberg might have a new Phillies catalyst, Ben Revere, in his midst.

Sports

2014 Boston Marathon results: American Meb Keflezighi wins…

2014 Boston Marathon results: American Meb Keflezighi wins men's race

Education

The benefits and challenges of intensive summer programs

Get the facts on taking an advanced college course.

Wellbeing

Why you need a facial

What can a facial do for your face that a washcloth and soap can’t?

Wellbeing

You can have your healthy snacks delivered

To take the guesswork out of procuring snacks good for you and your family, check out one of these companies.

Wellbeing

Jillian Michaels wants to ‘Maximize Your Life’

The fitness star returns for her second “Maximize Your Life Tour.”