Facebook‘s (NASDAQ:FB) IPO has no doubt messed up a number of portfolios, but according to an inquiry from the Securities and Exchange Commission, the company at least probably kept it clean on the regulatory front.
Facebook faced rumors that it was not forthcoming about the problems with its mobile business. Yet during the IPO, the company did make a so-called “free-writing prospectus” filing that said: “We believe this increased usage of Facebook on mobile devices has contributed to the recent trend of our daily active users (DAUs) increasing more rapidly than the increase in the number of ads delivered.”
This message got lots of play in the media — including here at the IPOPlaybook — but many investors clearly looked past the information at the time.
While the SEC has so far found the company didn’t withhold info from investors, the inquiry still is ongoing. The agency is looking at whether Facebook might have provided selective disclosures to analysts and whether brokers on the deal might have provided misleading information.
Still, Facebook has been IPO-ready for several years, with top-notch attorneys and auditors on board. Thus, it seems a little far-fetched that the company would find itself in blatant violation of regulations.
Tom Taulli runs the InvestorPlace blog IPOPlaybook, a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of “How to Create the Next Facebook.” Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.