WASHINGTON May 22 The Financial Industry
Regulatory Authority's chairman said on Tuesday that regulators
plan to review allegations that Morgan Stanley shared
negative news before Facebook's initial public offering
with institutional investors.
"The allegations, if true, are a matter of regulatory
concern" to FINRA and SEC, Ketchum told Reuters.
Ketchum made the remarks to Reuters in response to
allegations that Morgan Stanley, the lead underwriter on the
deal, unexpectedly delivered some negative news to major clients
in the run-up to Facebook's $16 billion IPO: The bank's consumer
Internet analyst, Scott Devitt, was reducing his revenue
forecasts for the company.
The allegations were detailed in a Reuters story late Monday
[ID: nL1E8GLGSG]. It is unusual for analysts at lead
underwriters to make such changes so close to the IPO, sources
told Reuters. It is unclear whether Morgan Stanley only told its
top clients about the revised view or spread the word more