Reuters reports another bombshell: "As Facebook officials traveled the country to talk up the company's $16 billion initial public offering this month, the social networking giant advised analysts for underwriters to reduce revenue and earnings forecasts, said people with direct knowledge." The report also says the company made the move after consulting with Morgan Stanley. If verified, that kind of selective disclosure puts a much harsher legal focus on Facebook.
The Senate Banking Committee says it is investigating the Facebook IPO. The House Financial Services Committee is also gathering information.
The head of the Financial Industry Regulatory Authority, an independent regulator, says that if the Reuters reports are true, the allegations "are a matter of regulatory concern to FINRA."
Robbins Geller, the San Diego law firm that recovered $7.2 billion for Enron shareholders in the largest-ever class-action settlement, is one of at least eight law firms to file class-action suits against Facebook and its underwriters.
Facebook stock recovers a bit, closing at $32 a share.