Morgan
Stanley’s underwriting of Facebook’s IPO has been thought by some of the bank’s
rivals to be incompetently managed.
According to the New York Times, “(r)ival bankers and big investors have
complained that Morgan Stanley botched the I.P.O., setting the price too high
and selling too many shares to the public.”[1] Interestingly, the incompetence is
positively correlated with unethical policy decisions at the bank. Even as the
bankers as underwriters were eager to sell lots of shares, they may have given some of
their institutional customers—albeit only the most preferred, as per the bank’s
other services—some privileged information. If this charge is true, the conflict of interest at the bank should be closely examined by Congress and any relevant regulators.
The full essay is at Institutional Conflicts of Interest, available in print and as an ebook at Amazon.
1. Evelyn Rusli and Michael De
La Merced, “Facebook I.P.O. Raises Regulatory Concerns,” The New York
Times, May 22, 2012.
