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Facebook says SEC’s IPO probe ends
Facebook Inc said the US Securities and Exchange Commission (SEC) dropped its probe into the social networking company over events surrounding its controversial initial public offering. In its quarterly report filed last Thursday, Facebook said the regulator in May “notified us that it had terminated its inquiry and that no enforcement action had been recommended by the SEC.”
Facebook shares began trading on May 18, 2012, but soon fell below their US$38 per share offering price and had lost more than half their value by the middle of August, angering investors. The launch had been tarnished by technology problems that delayed trading and caused difficulty in processing trades.
Investors also complained they were not told just prior to the IPO that analysts at Facebook’s investment banks were cutting their forecasts after learning of the company’s internal projections for advertising revenue. The end of the SEC probe does not affect shareholder litigation against Facebook, Chief Executive Mark Zuckerberg and many banks over the Menlo Park, California-based company’s IPO. This litigation remains pending in Manhattan federal court.