Reuters - Massachusetts Fines Morgan Stanley Over Facebook IPO

Morgan Stanley, the lead underwriter for Facebook Inc.'s initial public offering, will pay a $5 million fine to Massachusetts for violating securities laws governing how investment research can be distributed, Reuters reported. Massachusetts' top securities regulator, William Galvin, charged on Monday that a top Morgan Stanley banker had improperly coached Facebook on how to disclose sensitive financial information selectively, perpetuating what he calls "an unlevel playing field" between Wall Street and Main Street. Morgan Stanley has faced criticism since Facebook went public in May for revealing revised earnings and revenue forecasts to select clients before the media company's $16 billion initial public offering.

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