SEC finds Facebook didn't hold back info from investors -- report
The Securities and Exchange Commission says the social network told potential investors enough about its risks prior to its IPO, unnamed sources tell Bloomberg.
The Securities and Exchange Commission didn't find any evidence that Facebook withheld pertinent information from investors prior to its initial public offering, Bloomberg reported today.
The commission began investigating the social network's initial public offering, or IPO, in May, after Facebook's stock dropped. The stock still hasn't recovered from that day, and is currently trading at around half of its $38 IPO price.
While the investigation isn't over, the commission has determined that Facebook did not act wrongly, an unnamed source told Bloomberg. The SEC is still looking at whether or not retail investors lost money because the company didn't disclose certain information about.
The SEC and Facebook both declined to comment.
The bungled IPO has been a constant source of woe for Facebook, so an SEC vindication would be a welcome vote of confidence for the social network.
It could also beef up Facebook's defense as it fights afrom investors who claim the social network failed to disclose in the critical days leading up to the IPO that there was "a severe and pronounced reduction" in forecasts for Facebook's revenue growth. Nearly 50 suits were filed.