NEW YORK, May 22 (UPI) -- U.S. and Massachusetts securities regulators are looking into possible irregularities in Facebook Inc.'s initial public offering, officials said.
Morgan Stanley may have provided some institutional investors with an analyst's negative reports it did not share with others prior to the Facebook IPO last week, the Los Angeles Times reported Tuesday.
Massachusetts regulators have subpoenaed Morgan Stanley "in connection with the discussions by their analyst with certain institutional investors about the revenue prospects for Facebook prior to that company's initial public offering," the Massachusetts secretary of state's office said in a news release.
Rick Ketchum, chairman and chief executive officer of the Financial Industry Regulatory Authority, told the Times in an e-mail the allegations would be "a matter of regulatory concern" to the Securities and Exchange Commission and to the Financial Industry Regulatory Authority Inc., a private corporation that serves as a self-regulatory body for the securities industry.
SEC Chairwoman Mary Schapiro told reporters in Washington the commission needs to look into the Facebook IPO and JPMorgan Chase & Co.'s recent $2 billion trading loss.
"I think there is a lot of reason to have confidence in our markets and in the integrity of how they operate, but there are issues that we need to look at specifically with respect to Facebook and, as we just testified to, we're also looking closely at the JPMorgan trading," Schapiro said.
There was no comment on the report from Morgan Stanley, the Times said.
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