3 ms·

Here's the facts: the information upon which analysts reduced their estimates was publicly available. There was no secret, insider information. It was based o

by joedev 14y ago

Here's the facts: the information upon which analysts reduced their estimates was publicly available. There was no secret, insider information. It was based on FB filings with the SEC. Failing to research a stock before investing is just dumb to the point where plaintiff's really should, by natural consequence, lose. If losses are always recoverable via lawsuit or government bailout, all we do is perpetuate such gambling. Taking no responsibility for oneself and having a deep-rooted need to find someone to blame is becoming the great American way. Depressing.

trimbo 14y ago
Not stating an opinion either way, but describing what the lawsuit is actually about here. Morgan Stanley's analyst, Scott Devitt, adjusted their estimates and they then gave that information to high-end MS customers, but not to the public. The question is whether or not MS has a responsibility as an underwriter to disclose that information to an audience broader than its own clients as material information about the company, or if they had any additional material information about the company that led them to cut that estimate. More: http://dealbreaker.com/2012/05/even-the-underwriters-were-sick-of-facebook-by-the-time-the-ipo-priced/ http://dealbreaker.com/2012/05/even-the-underwriters-were-si...
- joedev 14y ago
  "The question is whether or not MS has a responsibility as an underwriter to disclose that information to an audience broader than its own clients" That is an interesting question and will be a good suit to watch. If the finding is that there was a responsibility to broadly disseminate such information, it will also be interesting to see what the impact is to the financial advisory industry.
  - harold 14y ago
    What concerns me more than public dissemination of analysis would be the instance of them only disseminating negative information to a select group of their own clients, while leaving their other mom and pop clients in the dark. That would seem to be a clear violation of fiduciary duty, and if it turns out that's what they did, I hope they get the book thrown at them.
- fleitz 14y ago
  They don't, there are chinese walls in between the analysis and trading groups. Research is a product most banks sell, if you don't purchase it, you don't get it.
  - mbucc 14y ago
    There are supposed to be Chinese walls. If you read the article about Ted Parmigiani in last Sunday's New York Times, it seems the walls can be like the one in A Midsummer Night's dream. http://www.nytimes.com/2012/05/20/business/is-insider-trading-part-of-the-fabric-on-wall-street.html http://www.nytimes.com/2012/05/20/business/is-insider-tradin...
a3d6g2f7 14y ago
While your last two paragraphs are true, it's not clear they apply to this case. What is clear is that some folks have some very wishful thinking with regard to Facebook, the company. Ask yourself why. No matter what you may think of FB, it is going to come down to the actions of the FB execs. If they knowingly tried to mislead common investors, then common investors are certainly not to blame. Meanwhile, the FB stock is becoming a pariah. So even if they have some valid reason for changing their estimates days before the IPO, and they can explain why the insiders were the only ones who seemed to get the message, it may be a moot point. Because they have spooked investors. And it's a stretch to try to blame investors for being spooked. The victim here is actually FB. The end of FB, and its replacement with a private and optimised means of sharing that _you_ control, is the beginning of a better web. It may not be Diaspora. There is still lots of time for this to play out.

by joedev 14y ago

trimbo 14y ago

Not stating an opinion either way, but describing what the lawsuit is actually about here. Morgan Stanley's analyst, Scott Devitt, adjusted their estimates and they then gave that information to high-end MS customers, but not to the public. The question is whether or not MS has a responsibility as an underwriter to disclose that information to an audience broader than its own clients as material information about the company, or if they had any additional material information about the company that led them to cut that estimate. More: http://dealbreaker.com/2012/05/even-the-underwriters-were-sick-of-facebook-by-the-time-the-ipo-priced/ http://dealbreaker.com/2012/05/even-the-underwriters-were-si...

joedev 14y ago
"The question is whether or not MS has a responsibility as an underwriter to disclose that information to an audience broader than its own clients" That is an interesting question and will be a good suit to watch. If the finding is that there was a responsibility to broadly disseminate such information, it will also be interesting to see what the impact is to the financial advisory industry.
- harold 14y ago
  What concerns me more than public dissemination of analysis would be the instance of them only disseminating negative information to a select group of their own clients, while leaving their other mom and pop clients in the dark. That would seem to be a clear violation of fiduciary duty, and if it turns out that's what they did, I hope they get the book thrown at them.
fleitz 14y ago
They don't, there are chinese walls in between the analysis and trading groups. Research is a product most banks sell, if you don't purchase it, you don't get it.
- mbucc 14y ago
  There are supposed to be Chinese walls. If you read the article about Ted Parmigiani in last Sunday's New York Times, it seems the walls can be like the one in A Midsummer Night's dream. http://www.nytimes.com/2012/05/20/business/is-insider-trading-part-of-the-fabric-on-wall-street.html http://www.nytimes.com/2012/05/20/business/is-insider-tradin...

a3d6g2f7 14y ago

While your last two paragraphs are true, it's not clear they apply to this case. What is clear is that some folks have some very wishful thinking with regard to Facebook, the company. Ask yourself why. No matter what you may think of FB, it is going to come down to the actions of the FB execs. If they knowingly tried to mislead common investors, then common investors are certainly not to blame. Meanwhile, the FB stock is becoming a pariah. So even if they have some valid reason for changing their estimates days before the IPO, and they can explain why the insiders were the only ones who seemed to get the message, it may be a moot point. Because they have spooked investors. And it's a stretch to try to blame investors for being spooked. The victim here is actually FB. The end of FB, and its replacement with a private and optimised means of sharing that _you_ control, is the beginning of a better web. It may not be Diaspora. There is still lots of time for this to play out.