$80 billion more shares sold by morgon stanley than what really exists , false reports and lies all over ......
ANGRY shareholders have filed at least two lawsuits against Facebook and investment bank Morgan Stanley over reports that it withheld negative analyst reports about Facebook from some clients before the company went public.
Investor anger mounted overnight over the initial public offering of Facebook stock last week, which was fumbled by the banks that managed the deal and complicated by technical problems at the Nasdaq stock exchange.
The shareholder lawsuit, filed in federal court in Manhattan, accuses Morgan Stanley of withholding the negative analyst report from some clients while it prepared to take the stock public.
Investors said the members of a proposed class action have lost more than $US2.5 billion since the initial public offering last week.
One of the investors suing, Dennis Palkon, a professor at Florida Atlantic University, said that IPOs are tricky, but "this one had a lot of glamour, had a lot of interest. It has a lot of users. I thought it'd be a pretty good investment."
He bought 1800 shares of Facebook at $38 through his ETrade account, meaning that after Tuesday, he was down more than $12,000 on paper.
"I think there were problems all over the place," he said. "It was totally poor planning to raise the price as high as they did and then to add all those extra shares."
Morgan Stanley declined comment on the suit, but it said yesterday that it had complied with regulations in how it handled analyst reports before the IPO. Facebook called the lawsuit "without merit."
The Senate Banking Committee, the Securities and Exchange Commission and other regulators also plan to look into the IPO.
Regulators will probably want to comb over Facebook's prospectus, the information it provided to potential investors, to make sure the company's disclosures were accurate and complete.
State securities laws and industry rules, mostly broader in scope than SEC rules, give state and industry regulators a wider berth to sanction investment firms that they accuse of failing to act in investors' best interest.
It was the second stumble this month by a major Wall Street firm. JPMorgan Chase, usually revered for taming risk, has yet to contain a growing $2 billion loss in one of its trading units.
Judson Gee, a financial adviser in North Carolina , placed a call overnight to a client who had plowed $50,000 into Facebook stock on Friday, the day of the IPO.
Mr Gee said he called to tell the client, a restaurateur, about reports that Morgan Stanley had told only select customers about an analyst's reduction of revenue estimates for Facebook just before the IPO.
"I could see his jaw dropping on the other side," Gee said. "A lot of expletives came out." He said his client had asked: "How can they give that information to the big boys and not give it to the public?"
In the final planning of the IPO, Facebook, working with Morgan Stanley, raised the total number of shares being offered for sale by 25 per cent, to 421 million. They expected extraordinary demand for the stock by investors.
That appears to have been a miscalculation. Facebook stock jumped from $US38 to as high as $US45 in the opening minutes, but quickly sank toward $Us38 again. It dropped to about $US34 on Monday (Tuesday morning AEST) and $US31 yesterday. The stock recovered somewhat overnight and climbed $1.
The first trading in Facebook stock, originally set for 11am Friday, was delayed half an hour by technical glitches at the Nasdaq Stock Market, and brokerages are still sorting through problems with orders.
A person familiar with the matter, speaking on condition of anonymity because the person was not authorised to speak publicly, told The Associated Press that Facebook was in talks with the New York Stock Exchange to move its stock listing there from Nasdaq.
Lisa Lindsley, director of capital strategies for the American Federation of State, County and Municipal Employees, which has 1.6 million members and handles pension assets of $850 million, said the union was "very concerned about the lack of internal controls at all three firms," referring to Facebook, JPMorgan and Morgan Stanley.
Elizabeth Warren, architect of the Consumer Financial Protection Bureau and a Democratic candidate for Senate from Massachusetts, said Wall Street has lost an image that once said, "We are solid and we will be here forever."
"Banking should be boring," she said, "because boring creates confidence."
As if small investors needed a reason to feel queasier, the stock market is having its worst month of the year, mostly because of concerns about a debt crisis in Europe and whether Greece will exit the euro currency group.
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