By Sakthi Prasad and Olivia Oran

(Reuters) - The Securities and Exchange Commission is looking at whether it should relax rules governing what companies can say ahead of initial public offerings, Chairwoman Mary Schapiro said in a letter obtained by Reuters.

The review comes after Facebook Inc's botched offering, which prompted more than a dozen shareholder lawsuits accusing the social networking company and its underwriters of obscuring its weakened growth forecasts ahead of the listing. Facebook shares have fallen by nearly half from their $38 IPO price.

Some U.S. lawmakers have complained that small investors were kept uninformed in the run-up to the May IPO.

Schapiro has asked her staff to review the "quiet period" rules that ban remarks about a company's prospects around the time of a share sale, according to a letter she sent last week to Republican Congressman Darrell Issa, who heads the House Oversight and Government Reform Committee.

"We should review our communications rules and the application of the quiet period in light of the changes in both the way the market functions and the changes in communications technology that have occured since our last major reform in 2005," Schapiro wrote in her Thursday letter, which was a response to one Issa sent in June.

Issa has pushed for a regulatory overhaul after Facebook's IPO showed "substantial flaws" in the process. The long-awaited offering in May was hit with a slew of problems, including trading glitches on Nasdaq and allegations that the underwriters' research analysts passed on new earnings estimates to top investor clients.

Issa wrote in a June 19 letter that in the case of Facebook's IPO, "the informational disadvantage to the less informed public proved harmful."

Banks involved with the Facebook IPO have said they followed standard procedure during communication with investors and were in compliance with the law.

Schapiro said in the letter that she would not comment on the Facebook share offer, but did say the SEC could review rules that gag company executives ahead of an IPO to prevent hyping of a stock.

The Wall Street Journal first reported the news.

(Reporting by Sakthi Prasad in Bangalore and Olivia Oran in New York; Editing by Lisa Von Ahn)