Morgan Stanley Under Scrutiny For Handling Of Facebook IPO

05:36

May 23, 2012

Facebook founder, Chairman and CEO Mark Zuckerberg, center, rings the Nasdaq opening bell from Facebook headquarters in Menlo Park, May 18. (AP) — Facebook founder, Chairman and CEO Mark Zuckerberg, center, rings the Nasdaq opening bell from Facebook headquarters in Menlo Park, Calif., May 18. (AP)

It was supposed to be easy. You've already created the largest social networking site the earth has ever seen. So you take your company public and everyone gets rich.

Instead, the best way to describe the current status of Facebook's initial public offering is, well, "it's complicated."

Since the social media giant started trading publicly Friday, shares have dropped from the initial public offering of $38 a share to around $32 this afternoon.

But the underwhelming stock performance is just part of the problem. On Wednesday, Massachusetts Secretary of State William Galvin began an investigation into Morgan Stanley, the investment bank that handled Facebook's IPO. The investigation is related to allegations that Morgan Stanley gave some clients negative information about Facebook ahead of the IPO.

Meanwhile, a group of investors have taken steps toward bringing a class action lawsuit against several banks over Facebook stock.

Guest:

Beth Healy, business reporter, The Boston Globe

More:

Boston Globe "Galvin investigating Facebook IPO"

This segment aired on May 23, 2012.