"This IPO is a poster child for all that's wrong with current practices," Blumenthal said in an interview, The Washington Post reported Saturday.
The Securities and Exchange Commission has not confirmed or denied that it is conducting an investigation into the Facebook IPO that was marred by technical problems, including a 30 minute delay and difficulty for traders to confirm transactions on the day of Facebook's public debut.
Areas of concern include underwriter Morgan Stanley giving one set of information on Facebook's revenue forecast to one set of investors and holding that information back from others, the Post reported.
"You wonder, isn't there something wrong with this picture? Where the underwriters selectively pick (who should receive) information, then the public is not only permitted but encouraged to participate?" Blumenthal asked.
Morgan Stanley's Chief Executive Officer James Gorman has insisted that the firm followed established rules throughout the IPO. Some, however, say the case provokes new questions, including whether or not the recently passed JOBS Act went too far by allowing companies with under $1 billion in revenue a separate set of rules about what must be disclosed before an IPO compared to larger companies.
The law was supposed to make it easier for smaller companies to go public.
"I voted against the JOBS Act, and the Facebook IPO may be Exhibit A why we need to revisit some of the issues that were given so little attention," Blumenthal said.