Senate panel to launch review of Facebook IPO

AP News
Posted: May 23, 2012 12:57 PM
Senate panel to launch review of Facebook IPO

A Senate panel is reviewing Facebook's high-profile stock offering last week amid allegations that the bank handling the IPO may have provided select clients with a negative assessment of the company.

A Democratic aide to the Senate Banking Committee says the panel wants to learn more about the initial public offering. The committee seeks briefings with representatives of Facebook, regulatory agencies and others. The aide spoke on condition of anonymity because the committee's planned inquiry hasn't been publicly announced.

Regulators are examining whether Morgan Stanley, the lead underwriter for the IPO, selectively informed clients of an analyst's negative view of Facebook's prospects before the stock offering. A group of shareholders have sued Facebook and Morgan Stanley, alleging the IPO documents contained false statements and omitted important facts.