back to article Morgan Stanley cops $5m fine over Facebook IPOcalypse

Morgan Stanley has been fined $5m for allegedly coaching Facebook on how to selectively release its financial information before its market debut. The lead underwriter for Facebook's IPO has settled with the Massachusetts securities regulator, William Galvin, neither admitting or denying the allegations. The banks that …

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Anonymous Coward

Okay result

It's good that they were fined but it doesn't really help all the chumps who've lost their money to this.

I'm still bitter over the government coming in and taking away my shares in Northern Rock but then continuing to run the bank. Give me my shares or give me my money :(

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jai
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Re: Okay result

The fine is a joke. A bank the size of Morgan Stanley won't notice 5 million. They've probably got a slush fund 100 times that much for misc expenses. The fine is purely to appease the press and the common Joe on the street to make it look like the SEC is at all capable of intimidating the Wall Street banks. When in fact, this has exactly zero deterrent to stop Morgan Stanley or any other bank from doing exactly the same again.

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Re: Okay result

"the chumps who've lost their money"

'Chumps' is the right word for people who invested in this. They took a gamble on a company with no products and no real assets, which arrogantly valued itself above the highest pre-IPO estimates. Surprise surprise, it didn't pay off. Why should anyone else but those who foolishly invested pay for their mistakes? They should stop bitching, cut their losses and move on.

Fools and their money etc.

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Re: Okay result

Like all those chumps who sold a useless shiny metal for $2500/oz when our highly intelligent and highly respected chancellor had sold all ours for $200/oz

It's not a question of idiots investing in an IPO - it's as if the Racing Post wrote that Dogmeat in the 2:30 at Doncaster was a cert to win, when they knew it had two broken legs and agrophobia and were using that to lay off their own bets

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@Yet Another Anonymous coward Re: Okay result

"It's not a question of idiots investing in an IPO"

Yes, I know that wasn't what the article was about. I was just replying to the AC's off-topic comment :o)

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Unhappy

Re: Okay result@jai

You're right that the fine is a joke. But the shame here is that US regulators allow corporations to settle without admitting liability. That's what is wrong.

As things stand, MS, Goldman, and the rest, conduct serially improper business practices, knowing that the absolute worst outcome is that they will have to give back some fraction of the profits on the specific misdeed, but not to have to apologise or admit guilt, and they'll be allowed to start developing the next way of fleecing thier customers. As it isn't their money, the financial penalty is no penalty at all, as you state, and we have a worrying scenario where regulators raise what are in effect raise tax revenues (not compensation for the victims), in return for allowing the offenders to get away without admitting guilt.

What would be far better would for US regulators to insist on "admission of liability and wrongdoing" in the settlements, regardless of the fine, and let the civil courts then address the compensation to victims. Worryingly, UK regulators have long looked at the US system, and envied this idea of no guilt settlements, so this sort of thing is perhaps the Ghost of Christmas Future for the UK.

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FAIL

$5 Million ?

Chump-change for a bank

I bet they're all still laughing.

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Re: $5 Million ?

That was my reaction too. They probably paid that out of petty cash.

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Re: $5 Million ?

I bet they paid in pennies too.

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Holmes

Re: $5 Million ?

What's that?... US gov is running around "fining" foreign companies BEEEEELIONS on much more spurious grounds, but fines good ol' US of A banks change so small they wouldn't bother to bend to pick it up if they'd dropped it in the street.

So what's new? It's called "protectionism" and they've been at it flagrantly for 200 years. Keep up will you!

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Terminator

Good word

IPOcalypse - Nice work :-)

Though if if you say it without the capitalisation it does sound rather like what will happen when all the iDevices eventually gang-up on us and take over the world...

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Slap on the wrist. Used to work there, worst place I ever worked in my entire life, worse than fast food joint in my teens. Very high turnover rate while I was there.

Oh well, not surprising really, US polits receive considerable contributions from Wall Street mega-corps like this so par for the course. They'll get this money back in no time from the next investors they'll fleece.

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IT Angle

Impunity - Complete Impunity

We are supposed to live in a democratic and freeworld, well I say bollocks.

These bastards move about their business with almost complete impunity. This is a company that deals in Billions of dollars ( Yes I know that this is not their benefit), $5 Million won't make a ripple in what they are capable of earning.

They manipulate people, figures, business in order to ensure their gains and the money they play with is not theirs to begin with so they can't even lose.

And yet the continue to steal, contrive and cheat whomever they please with complete impunity.. Is this the freeworld that we are supposed to enjoy. No, it's not capitilism either, making money is different from stealing money.

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Anonymous Coward

Re: Impunity - Complete Impunity

Umm, I'd dial back a little bit here for some aspects

I'm fully with anyone who states that this fine is ridiculously low but even someone as financially inept as me spotted that the valuation was, well, idiotic is probably the most gentle way to describe this.

Any institutional idiot who would have bought themselves in at that price should have been relieved of their job immediately, and I'd be surprised that it is possible that private investors bought this - if they invest so incompetently I'm amazed they had any money left to buy FB stock, and although the company that shares its initial with Microsoft (as well as it's approach to dealing with clients) was involved, I must say that you can't blame them for having idiots for clients.

What you CAN blame them for is manipulation and false statements, and there I am fully in agreement that that fine was measly in comparison to the crime.

Personally, I think they should bring back stocks (yes, winter is no barrier), and only people affected would be given a permit to sell rotten food to throw at those convicted. That would IMHO have a more correcting effect than given the company a reason to rip off more clients or cheat some more on tax to pay the fine. Or double taxation on any board level bonus payments if the company gets above a certain threshold of convictions. Something that *hurts* the people involved. Otherwise it's just a tax write-off.

Or bring back hanging - just not by the neck.

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Re: Impunity - Complete Impunity

A better punishment would be for their opening pitch to any new customers to include the line "We have made a business model out of conning customers just like you and we are likely to do the same again" alongside the "investments can down as well as up" small print

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Gimp

Re: Impunity - Complete Impunity

<- Appropriate attire for such activities?

"Or bring back hanging - just not by the neck."

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Pint

Enough!!

stop the 'blood' money payments, if you want these buggers to stop doing this sort of stuff throw a few of them in jail for a few years and fine them personally.

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Unhappy

Re: Enough!!

If you're just a punter and try that kind of trick they will throw you in jail fast - but the bankers we just let of the hook. They probably booked that as misc. expenses. A more appropriate punishment would be to tell them to stop doing any new business for a year - then they might start listening.

Criminals the lot of them.

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Anonymous Coward

Re: Enough!!

Bet they claim tax and interest relief on the fine too by paying through an offshore subsidary

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What amuses me...

After reading http://www.telegraph.co.uk/technology/google/9723401/Eric-Schmidt-declines-Obama-cabinet-post.html about how Eric Schmidt was offered the job of Treasury Secretary, or Secretary Of Commerce, or a new "Secretary of Business" post, I find it amusing to think that the some people consider the *Republicans* to be under the thumb of Big Business while the Democrats somehow get to be considered the party of the common people. I can not escape the feeling that if Romney was elected and the FTC did this, the press would be up in arms about it.

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When will they fine Goldman Sachs?

GS did a major fiddle to slide the Greeks into the EU. Now we taxpayers (or the German ones) get to pay for GS helping to shoehorn Greece into the Union when it was plain to a parakeet that they did not have the financials to meet the demands and standards. Same sort of mentality: sure we can help you work that...

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Re: When will they fine Goldman Sachs?

Germany did a major fiddle to slide the Greeks into the Eu so that they could run up huge credit card debts to buy BMWs and Bosch washing machines.

Germany just forgot that when they could't pay the German credit card companies back - it might be Germany on the hook for it.

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Pirate

Come the revolution.....

They will be first up against the wall. Going to need to build a big wall to line them al up against though.

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Anonymous Coward

Re: Come the revolution.....

Going to need to build a big wall

Nah, stack up the first batch as corpses. No self respecting insect will go near that sort of food, so it'll last long enough to make world finance safe again.

The problem is, where do you stop? Lawyers, politicians, estate agents, parking wardens - you'll need quite a few bullets..

Enough black humour, back to work.

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This post has been deleted by its author

WTF?

Is something still going on?

According to my stock monitor Facebook is sitting at about $27. That's a impressive, if somewhat depressing, rebound from the low of around $18 several months ago. How come it hasn't dropped under $5 by now? I suspect continuing shenanigans.

(All prices are per share, not total capitalisation.)

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Unhappy

Absurd valuation. partly *because* of what they did.

Moral of story.

Whenever you read of some "leak" ask yourself who benefits from you hearing this?

Because chances are it is not you.

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Anonymous Coward

Pump and Dump Scam Artists

Morgan Stanley, Goldman Sachs... They are both equally evil. Inflate the price of the stock, make sure the owners and they get paid hundreds of millions, then cash out before anyone notices.

People who were around for the dotcom bust in the late 90's should recognise this behaviour, but people are stupid and greedy and have lousy memorys.

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