According to a recent Atlantic Wire article, Morgan Stanley, JP Morgan and Goldman Sachs, the three banks that underwrote the Facebook IPO, all downgraded their IPO forecasts.

Even more troubling is that the banks appear to have passed that information along to only a handful of institutional investors, without sharing it on a wider basis. If true, that could possibly be a direct violation of securities law amounting to insider trading.

The article reported that the chairman of the FINRA said at the allegations are very serious and will be reviewed by FINRA and possibly by the SEC. The underwriting banks are accused of knowing negative information about the company but chose to keep it a secret from all but a very few investors. There is the possibly, according to the article, that the actions of the underwriting banks could be considered insider trading.

If you or someone you know has lost money as a result of an investment, please contact Richard Frankowski at 205-747-1903 to discuss your potential legal remedies.