Facebook flotation 'flouted rules'
Morgan Stanley broke rules on investment bankers influence
Morgan Stanley's flotation of Facebook broke strict rules on investment bankers influencing the research staff who write about stocks, US regulators have found.
Bloomberg News says that the team charged with putting the deal together pressured analysts to write upbeat assessments of the social media firm and has been fined $5.5 million by regulators who faulted Morgan Stanley for dishonesty, ethics violations and failing to supervise staff.
Shares in Facebook fell steeply as soon as they started trading yesterday and fell again during the day after a 'lock up' agreement ended and some staff sold stakes given as rewards. They are now worth 30 per cent less than at the time of the Initial Public Offering in May.