Facebook I.P.O. Raises Regulatory Concerns - NYTimes.com

Definitely a historic IPO, but probably not what Facebook had in mind

"But regulators are concerned that banks may have shared information only with certain clients, rather than broadly with investors. On Tuesday, William Galvin, the secretary of state in Massachusetts, subpoenaed Morgan Stanley over discussions with investors about Facebook’s offering. The Financial Industry Regulatory Authority, Wall Street’s self-regulator, is also looking into the matter. The chairwoman of the Securities and Exchange Commission, Mary L. Schapiro, said Tuesday that the agency would examine issues related to Facebook’s I.P.O., but she did not elaborate.
The steps a company takes to go public are highly choreographed and regulated by securities law. A company cannot comment or disclose new information about its business or prospects unless it does so publicly by amending its prospectus. Otherwise, it risks running afoul of regulators. The company could also be vulnerable to securities lawsuits, as investors would have to prove only that it made “material misstatements” ahead of an offering, rather than a high threshold of securities fraud."

Facebook I.P.O. Raises Regulatory Concerns - NYTimes.com