Shareholders are suing Facebook and banks, claiming information was concealed ahead of the Facebook's initial public offering. The suit also names Facebook founder Mark Zuckerberg (center, shown clapping). (Source: Facebook)(RNN) Shareholders are suing Mark Zuckerberg, Facebook Inc. and banks who were underwriters for the social network, including Morgan Stanley, claiming information was concealed ahead of the Facebook's initial public offering, Reuters reports.
The lawsuit was filed in U.S. District Court in Manhattan on Wednesday. Shareholders allege research analysts at some of the underwriters had lowered their business forecasts for Facebook, but only informed "preferred investors" instead of making the information public.
William Galvin, the securities regulator for Massachusetts, is investigating the same charges and has subpoenaed Morgan Stanley, according to the Associated Press.
Facebook opened the IPO at $38 and reached $45 on the opening day, but the price has since fallen 18 percent, raising charges that the stock was overpriced.
In a statement to CNN, Morgan Stanley denied any wrong-doing, saying that the company followed "the same procedures for the Facebook offering that it follows for all IPOs."
The AP also is reporting that the Senate Banking Committee is investigating how the IPO was handled. The panel wants to interview representatives of Facebook, regulatory agencies and others.
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