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"The finger-pointing over Facebook's disappointing IPO continued Tuesday night as Massachusetts Secretary of Commonwealth William Galvin subpoenaed Morgan Stanley over one of its analyst's critical report of Facebook prior to its stock market debut.\n\"The Securities Division has put out a subpoena to Morgan Stanley in connection with the analyst's discussion with certain institutional investors about the revenue prospects for Facebook,\" a rep for Galvin told Reuters. \nThe inquiry comes after a report emerged that Scott Devitt, consumer Internet analyst for Morgan Stanley, lowered his projections for Facebook\u2019s revenues in both the second quarter and full-year 2012, according to Reuters, which did not provide further details. Such information may not have been available to many investors before the stock was listed.\nDevitt\u2019s report may have contributed to the stock\u2019s so-far lackluster performance. Though analysts like Devitt operate independently of the firm\u2019s investors, it is highly unusual for the lead underwriter or a looming IPO to declare such a bearish opinion on the company at such a late date.\nIn response to Mashable's inquiry about that report, a Morgan Stanley rep issued the following statement:\n\n\"Morgan Stanley followed the same procedures for the Facebook offering that it follows for all IPOs. These procedures are in compliance with all applicable regulations.\nAfter Facebook released a revised S-1 filing on May 9th providing additional guidance with respect to business trends, a copy of the amendment was forwarded to all of MS\u2019s institutional and retail investors and the amendment was widely publicized in the press at the time.\nIn response to the information about business trends, a significant number of research analysts in the syndicate who were participating in investor education reduced their earnings views to reflect their estimate of the impact of the new information. These revised views were taken into account in the pricing of the IPO. \"\n\nIn addition to Massachusetts, there may be more government scrutiny. Securities and Exchange Commission Chairman Mary Schapiro told The Wall Street Journal Tuesday that her agency will examine \"issues\" surrounding the IPO. \nImage courtesy of Flickr, J1myi"^^<http://www.w3.org/2001/XMLSchema#string>
<http://mashable.com/2012/05/23/massachusetts-morgan-stanley-facebook-ipo/>