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Shareholders file lawsuit over Facebook flotation

Meanwhile a US Senate committee is considering launching an inquiry into the social network’s recent flotation.

The pre-market price for Facebook shares shown in New York this morning.
The pre-market price for Facebook shares shown in New York this morning.
Image: AP Photo/Mark Lennihan

A US SENATE PANEL is preparing to launch an inquiry into the flotation of the social network Facebook last week.

The company’s shares floated at $38 on their first day of trading on Friday, but have dipped since trading opened on Monday and are currently priced at around $32 a share.

An aide to the Senate Banking Committee said today that it wants more information about the initial public offering and will seek meetings with representatives from Facebook and regulators.

Meanwhile, a group of shareholders is suing the company and Morgan Stanley, which was the lead underwriter for Facebook’s IPO. They claim that the IPO documents omitted key information about the company’s growth forecasts and contained false statements.

The AP reports that US regulators are looking into whether Morgan Stanley selectively informed clients of an analysts

Morgan Stanley has not commented on the lawsuit, but says it fully complied with rules concerning the IPO.

- Additional reporting by the AP

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