( CNN ) -- Facebook 's IPO was all the rage Friday . Retail investors -- people like you , me and our neighbors -- flocked to the offering in hopes of returning to those glory days when a dramatic rise in stock price was a given . But , alas , like so many recent IPOs , Facebook languished near its offering price on its first day and dropped on subsequent days of trading . It could have been worse . Disgruntled investors had ample opportunity to sell Friday afternoon once technical issues at Nasdaq were resolved . Those who chose to sell did so at a profit . Investors in some other IPOs never have the chance to recoup what they put in . For example , PetroLogistics , a company that owns the world 's largest propane processing plant , began trading below its offering price in early May . Nearly a month later , the stock still trades below what original investors paid . So if profits are n't guaranteed , why the uproar over Facebook 's IPO ? Because an analyst at Morgan Stanley , the investment bank which set the offering price , released a report lowering the financial forecast for the company just before the offering . Angry stockholders allege the report was released only to a select circle of institutional investors , who then headed for the door . Consequently , most investors were left to shoulder the loss . If this feels unfair to you , you 're not alone . After all , why should you have to lose out ? After the dot-com crash , WorldCom and Enron , Congress included provisions in the much maligned Sarbanes-Oxley legislation to address potential conflicts of interest . Among other things , the bill led to a so-called `` Chinese Wall '' separating communication between investment bank research analysts and underwriters . However last month a bipartisan bill , innocuously named the JOBS Act , rolled back these and other investor protections for companies with less than $ 1 billion in revenue , deemed emerging growth companies . Once again , research analysts can communicate directly with management and if desired share favorable ( or unfavorable ) reports . Under these new rules it is only a matter of time before an enterprising young analyst crosses the line and writes an ethically questionable report . Prior to Sarbanes-Oxley , researchers at Cornell and Dartmouth universities found that analysts affiliated with the underwriting bank issued buy ratings to prop up dropping stocks , only to watch the stocks drop further after the buy rating was issued . This was in direct contrast to reports written by unaffiliated analysts , where stocks rose following a buy rating . The differences in performance were staggering . For markets to function effectively , investors need to trust the information reported by companies , and research analysts need to be able to act independently . Investors should remember that any stock can lose value no matter how much hype surrounds the company , and that research analysts have many bosses -- not just the small investors on the streets . Congress must create a level playing field such that every investor has a fair shake , not just those who have special access . Facebook was just a warning . The real risk lies in the countless other IPOs less likely to receive so much scrutiny and spotlight . The opinions expressed in this commentary are solely those of David Wessels .
Investors are suing Facebook about withholding information on the company 's IPO . David Wessels : Small investors like you and me lose out . The stock market is down more than 1 percent since its peak in Wessels : Facebook was just a warning ; future IPOs are more risky .