Reuters: Regulatory News: UPDATE 1-Senate Banking panel reviewing Facebook IPO issues

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UPDATE 1-Senate Banking panel reviewing Facebook IPO issues May 23rd 2012, 17:11 Wed May 23, 2012 1:11pm EDT * Senate Banking panel meeting with regulators, Facebook * Panel's review is not considered a formal probe * Other securities regulators already looking into Facebook IPO By Sarah N. Lynch WASHINGTON, May 23 (Reuters) - 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. Link this Share this Digg this Email Reprints

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