Mass. state secretary issues subpoena to Morgan Stanley related to offering of Facebook stock

BOSTON – Massachusetts’ top securities regulator has subpoenaed Morgan Stanley related to allegations that it gave some clients negative information about Facebook before last week’s initial public offering.

In a statement Tuesday, Secretary of the Commonwealth William Galvin said his office is investigating whether Morgan Stanley divulged to some clients that its analyst had cut his revenue estimate for Facebook.

The analyst’s revision followed an amended filing by Facebook in which the company said a shift by many Facebook users toward mobile devices might limit its revenue growth.

Facebook’s stock slid further Tuesday on its third trading day, dropping 9 per cent to US$31. The social networking company has fizzled since its long-awaited public offering last week at $38.