Morgan Stanley fined $5 million by Massachusetts for Facebook IPO

Morgan Stanley fined $5 million over claims they coached Facebook in how to selectively release info.

| Dec 17, 2012 at 7:02 pm CST

It looks like Massachusetts is the first to take action over Facebook's seemingly botched initial public offering. The state has fined Morgan Stanley $5 million over the IPO of Facebook, reportedly for violating securities laws that govern how investment research can be distributed.

Morgan Stanley fined $5 million by Massachusetts for Facebook IPO |

One of Morgan Stanley's top bankers reportedly improperly coached Facebook on methods to disclose financial information selectively. This, according to William Galvin, continues the trend of creating "an unlevel playing field" between Wall Street and Main Street.

A $5 million fine really is quite tiny in the overall scheme of things. Morgan Stanley will hardly notice the fine, and it's a tiny amount compared to the valuation and money brought in by Facebook's IPO.

"The conduct at Morgan Stanley was more egregious," he said, in reference to a similar charge against Citigroup in late October. "With it we will get their attention and begin to take steps in restoring some confidence for retail investors to invest."

This is just the first of many likely cases against Facebook and the underwriting banks.

Last updated: Jun 16, 2020 at 04:29 pm CDT


Trace is a starving college student studying Computer Science. He has a love of the English language and an addiction for new technology and speculation. When he's not writing, studying, or going to class, he can be found on the soccer pitch, both playing and coaching, or on the mountain snowboarding.

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