BOSTON – Massachusetts officials say they are fining investment bank Morgan Stanley $5 million for disclosing a revenue shortfall with analysts and institutional investors but not the general public ahead of Facebook’s troubled IPO in May.
Facebook filed amended documents on May 9 with securities authorities, but Morgan Stanley organized phone calls with analysts to relay revenue figures that the amendments didn’t include. Those numbers were lower than what many analysts had expected.
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Massachusetts’ Secretary of the Commonwealth, William Galvin, announced the fine Monday. In a press release, Galvin said Morgan Stanley’s “improper influence” was “yet another example of an unlevel playing field, where Main Street investors were put at a significant disadvantage to Wall Street.”
Morgan Stanley isn’t admitting guilt but agreed to be censured and pay the fine.
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