Morgan Stanley has been fined the equivalent of 3.8 million euros for breaking the law over some of its involvement with Facebook’s initial public offering of shares.
The US state of Massachusetts fined the bank for coaching Facebook on how to selectively disclose sensitive financial information.
The state’s securities regulator, William Galvin, said that as some clients had revised earnings and revenue forecasts for the social media website others – small private investors – were left at a disadvantage.
This is the first time a case stemming from Morgan Stanley’s handling of the Facebook offering has been settled.
Facebook had privately told Wall Street research analysts about softer forecasts because of less robust mobile revenues. A top Morgan Stanley banker coached Facebook executives on how to get the message out, Galvin said.
A Morgan Stanley spokeswoman said the company is “pleased to have reached a settlement” and that it is “committed to robust compliance with both the letter and the spirit of all applicable regulations and laws.” The company neither admitted nor denied any wrongdoing.