Morgan Stanley, the lead underwriter for Facebook's initial public offering, will pay a $5 million fine to Massachusetts to settle charges that its bankers improperly influenced its research analysts when the Internet company went public.
Massachusetts' top securities regulator, William Galvin, charged that Morgan Stanley improperly helped Facebook disclose sensitive financial information selectively, perpetuating what he calls "an unlevel playing field" between Wall Street and Main Street.
Morgan Stanley has been under criticism since the social media company went public in May for having revealed revised earnings and revenue forecasts to select clients on conference calls before the media company's $16 billion initial public offering. A Morgan Stanley spokeswoman did not immediately return a call seeking comment.
Galvin, who has been aggressive in policing how research is distributed on Wall Street ever since investment banks reached a global settlement in 2003, said the bank violated that settlement. He fined Citigroup $2 million over similar charges in late October.