Michael Ferrell, Boston Globe, on Sec. Galvin going after Morgan Stanley
Dec 18, 2012|
Michael Ferrell, Boston Globe, on Sec. Galvin going after Morgan Stanley.
Transcript - will not be 100% accurate
We covered the story about FaceBook earlier in the year that was basically the biggest botched IPO you ever saw as a result of some of the activity that went on prior to the IPO Massachusetts has find Morgan Stanley five million dollars covering this story from the Boston Globe. Is Michael -- Michael good morning. So. With Whitney what's the gist of the fine did Massachusetts going after Morgan Stanley fining them five million dollars why. Right and -- basically this the continuation of what we can go out and started to an actor. You know things went south with. Facebook's stock price didn't he find. Citigroup two million dollars earlier this year and now Morgan Stanley is in its sights. -- basically he's saying that. The investment banker that was doing the deal for Morgan Stanley which is the chief underwriter for FaceBook -- its IPO. A metal twists. Research and now. With research analyst weary shouldn't have been -- keeping me feeding information about. Some. You know negative projections for FaceBook revenue -- giving it to there analysts and keeping it from the general public. So the little guy got screwed in terms of what they take is a little guys Kate paid is much is what 4042 dollars a share. In and it promptly plummeted all the way down to what it how loaded ago it was down like nineteen. On down to seventeen in some change and that was then though it I think September. Yet since then it's been climbing you know I just checked this morning it's it's up. It's a 27 dollars now that's a long way away from where it was when it went public in today you know. Yeah for sure. Yeah no it is now he's the guy that did this is just the tip of the iceberg from what I can read Brady you've got this settlement. Five million dollars but is and there are still a lot of shareholder lawsuits and and ended that this is litigation that I would think would go on for several years. Possibly yeah I mean it would take. Your rights several years to -- shareholder lawsuits. Against. FaceBook it fell against Morgan Stanley to really get going but you know some. Securities -- I spoke with yesterday say what Galvin has in fact doing cadets and fuel that lawsuit says he's you know kind of laying out a roadmap. That that these these class action attorneys might follow and there. Yup there's Morgan Stanley did not admit any guilt did turnaround AJ gets settled will give you five million dollars or not admitting that things. Writes perhaps but I -- five million dollars from Morgan Stanley and you know huge. Burden. But so perhaps they you know it's better to -- checked and carry on. I wonder how much they made on this deal though because this isn't the first fine it's not if they did this litigation is gonna cost them. Potentially hundreds of millions of dollars a wonderfully made hundreds of millions of dollars under -- in the stock. That's -- today and someone you have. Clearly they've they've they did well music -- IPO you know you know it made you know sixteen billion dollars and in one of the biggest of all time. And they're real message here though is. That the institutional investors. Got better. Information or more information then the individual investor rights of the little guy that wanted to buy a hundred shares -- his E*Trade account. Didn't have access to the same information as the Goldman Sachs investment banker who was gonna by 2030 million shares. Right and that's what -- sank today is that the problem that he uncovered atlas. The retail investor in the main street investor didn't have the pain in -- that institutional investors. And make their decision. Mike what happens that money you know because we see the attorney general they'll find utility company and now bill gallons. Going after for five million think you sitting at two million at a city where does that money go to go into the state coffers does a good to build god gallons budget to elect how does that money get dispersed. Or two good question I think -- magic goes into state coffers. -- You'd think we'd have lower taxes on the case right now that it if -- if given all the fines we love it. But the -- story and you don't follow ups on any of the litigation Williams will be. It carefully especially will be watching what Gelman doing I mean I expect that given the Vietnam. You know. The his pursuit of the bankers in this case we may see another front coming out to the office. Zardari variant Stanford they are well thank you very much like it OR. BI -- our question of the day is have you finished your Christmas shopping. And it was yeah guess. So. Some of our listeners there in the same boat and on days they're not. -- your guy and growing up with -- all eyes I just remember them going out to the mall. After a few years yes and -- cocky you know Christmas. 60. Gosh go for the -- And they go to the mall you know. -- Whenever they hit a quitter of well over fit on the credit card whatever some cute sales -- sells them up at the last minute what I mean it just me -- plain and other guys out there that they're in the same position. In the same position more than a -- male shopper at the Victoria secret. -- Hey there's a new CEO. Over at Akamai Technologies. And the old CEO at staples is leaving we'll talk about those stories in just a couple of minutes right here on the financial exchange.