Bloomberg reports that in the first regulatory claims to flow from the May 17 IPO, Massachusetts officials said on December 17th that they fined Morgan Stanley $5m for letting its investment bankers provide research analysts specific revenue information that was not disclosed by Facebook to the general public. That broke a decade-old rule enacted after the dot-com crash to block bankers from influencing analysts, Massachusetts said.
The settlement includes for the first time details of the closed-door conversations between Morgan Stanley and Facebook ahead of the IPO, including testimony from Michael Grimes, who led the deal for the firm. According to the consent order, Grimes wrote a script for Facebook’s then-treasurer to read to analysts that detailed Facebook’s lowered revenue estimates.
Grimes 'did everything but make the phone calls himself', the regulator said in a statement. Grimes was identified in the settlement only as a 'senior investment banker', though it provided biographical details that match his.
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