All sales final (sort of): Morgan Stanley, the lead investment bank in Facebook’s troubled initial public offering, will compensate retail investors who overpaid when they bought Facebook’s stock in last week’s IPO, The Associated Press reports, citing an unnamed source familiar with the matter. The person says the firm is reviewing orders its retail clients placed for Facebook stock and will make price adjustments if the clients paid too much. The person spoke on condition of anonymity because he or she was not authorized to discuss the matter publicly. The person did not say what amount constituted overpaying for Facebook’s stock. Morgan Stanley and Facebook face at least two lawsuits over the IPO. Both suits allege that analysts at the large underwriting investment banks cut their second-quarter and full-year forecasts for Facebook just before the IPO and told only a handful of clients. Morgan Stanley has declined to comment on the lawsuits. Facebook has called the lawsuits “without merit.”
Conflicting interests: A former top enforcement official in the Securities and Exchange Commission’s Texas office has been barred from appearing before the agency for one year for violating conflict-of-interest rules, Reuters reports. The SEC says former Fort Worth enforcement director Spencer Barasch worked for the Stanford Group Co., the company led by convicted Ponzi schemer R. Allen Stanford, despite federal ethics rules that banned him from doing so. In January, Barasch agreed to pay a $50,000 civil fine to settle related claims from the Justice Department. At that time, Barasch had also hoped to settle the SEC action by agreeing to a six-month bar, but SEC commissioners unanimously rejected the offer amid concerns that it was too lenient, people familiar with the matter said at the time. Stanford was convicted in March of running a $7 billion Ponzi scheme. He was found guilty on 13 of 14 criminal counts, including fraud, conspiracy, and obstructing an SEC investigation. He has yet to be sentenced. Read the full story here.
In the vault: Bank of America Corp. and Barclays Bank are selling their stake in the apartment building owner Archstone to Lehman Brothers Holdings Inc.’s bankruptcy estate for $1.58 billion. The transaction, disclosed today for the banks’ 26.5% interest, will give Lehman’s estate full ownership of Archstone, an Englewood, Colo.-based company that owned all or part of 434 apartment communities in the United States and Europe as of the end of March. The move also blocks plans by Chicago-based Equity Residential, an apartment owner whose chairman is real estate magnate Sam Zell, to buy the stake. Equity residential had offered in December to acquire the Archstone stake from Bank of America and Barclays for $1.33 billion. But Lehman exercised its right to match other offers for the stake and agreed today to purchase the remaining stake of Archstone. The Associated Press has the full story here.
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