Facebook stock flotation runs into more trouble

By Mark Fordham

Facebook's stock market flotation has run into more controversy amid reports of concerns over the way advisers disclosed certain information to investors.

The social networking giant's shares fell another nine per cent on Tuesday (May 22nd) as regulators confirmed they may look into the disclosure process.

They will be doing this to ascertain whether some investors were handed favourable information ahead of others.

It has been reported that Facebook's advisers may have revised their financial forecasts for the company but only selected investors were told this.

Chief executive of the Financial Industry Regulatory Authority Richard Ketchum said the company and its advisers had questions to answer on "matters of regulatory concern".

However, lead underwriter on the flotation Morgan Stanley said its process was "in compliance with all applicable regulations".

In a statement, spokesman for the bank Pen Pendleton said it had "followed the same procedures for the Facebook offering that it follows for all initial public offerings".