Bloomberg reports that the SEC, whose investigation is continuing, is still looking at other IPO-related issues, including whether retail investors were harmed by misleading information from brokers or selective disclosures to analysts by the company’s bankers regarding Facebook’s prospects for mobile customers, said the person, who asked not to be identified because the probe is confidential.
Any conclusion by the SEC that Facebook made adequate disclosures of risks prior to its IPO would bolster the company’s defense against civil lawsuits filed by retail customers damaged by the sudden drop in the company’s initial $38 share price, which is about half that value now. During a 2 1/2 month pre-IPO review of Facebook’s filings, the SEC pushed repeatedly for more disclosures, which were made.
'It’s unlikely the SEC will pursue an enforcement action against Facebook based on what they were discussing before the IPO', said Peter Henning, a former SEC lawyer who teaches at Wayne State University in Detroit. 'The SEC would have objected even more strenuously if the company had not complied'.
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