The mess that Facebook is in with its initial public offering (IPO) is getting worse by the day because regulators are taking up the issues as well as having briefings with the staff, and now the U.S. Government enters the picture.
It’s getting so bad that the U.S. House and Senate committees that oversee financial sector matters are planning to look into the problems.
Sean Oblack, a spokesman to the Senate Banking Committee, said the review will focus on “issues raised in the news” and will conduct interviews with Facebook, staff, and stakeholders.
Marisol Garibay, a spokeswoman for the House Financial Services Committee, said staff there is also receiving briefings on the issue and “gathering information and facts.”
“While no hearings specifically focused on this IPO are planned at this time, the Committee will have hearings over the coming weeks where this topic is likely to be raised,” she said in a statement.
The announcements by the committees come on the heels of reports by Reuters that an analyst for lead underwriter Morgan Stanley cut his revenue forecasts for Facebook in the days before the offering.
It is unclear whether Morgan Stanley only told its top clients about the revised view or spread the word more broadly.
The IPO also suffered setbacks following a technology glitch on the Nasdaq exchange during Facebook’s first day of trading on Friday.
The Securities and Exchange Commission are reviewing the incident.
Neither committee aide said what specific issues they are looking at regarding the Facebook IPO.