SEC drops probe into Facebook's pre-IPO sales disclosures
The U.S. Securities and Exchange Commission has dropped its investigation into disclosures about Facebook advertising sales before the company went public in 2012.
Facebook said Thursday in an SEC filing that it was notified by the agency in May that the inquiry had been terminated and no enforcement action was recommended.
The SEC launched its investigation over claims that Facebook shared lowered advertising-sales projections immediately before its initial public offering with some analysts, who then shared that information with a select group of investors without disclosing it to the wider public.
Dozens of lawsuits were filed against Facebook over the matter. Many of them, however, were dismissed last year by a federal judge, who ruled that Facebook made “extensive warnings” in its registration statement around the health of its business tied to mobile trends.
Facebook’s mobile advertising business now is healthy and strong.
Morgan Stanley led the underwriting of Facebook’s IPO. The bank did not immediately respond to a request for comment. Facebook declined to comment beyond the filing, and the SEC declined to comment.
The events surrounding Facebook’s IPO are the subject of various state and federal inquiries. There were technical glitches too, which delayed trade notices and caused some trading firms to lose money due to mismatched shares.