Since Facebook’s underwhelming IPO debut last week, at least three separate shareholder lawsuits have been leveled against the company and its IPO’s lead underwriter, Morgan Stanley. They allege that the company has provided misleading assessments and left significant omissions in their IPO registration statement. On the same day, Massachusetts Secretary of Commonwealth William Galvin issued a subpoena to Morgan Stanley in response to allegations that the underwriter offered information about the IPO to only several of its institutional investors, not all – information that may have convinced the investors to hold off on picking up Facebook shares.
Peter J. Henning is a professor at Wayne State University Law School who specializes in white collar crime, corporate and securities law and legal ethics, co-wrote an article about this for the New York Times’ DealBook.
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