Kurt Nimmo
Infowars.com
May 24, 2012

Congress may begin an investigation of the Facebook IPO scam now that outrage is growing over what is essentially business as usual on Wall Street. Both the Senate Banking Committee and the House Financial Services Committee have announced they will “review” the case but have not announced a date.

An aide to the House Financial Services Committee told the media hearings are not specifically scheduled.

Ohio Democrat Sherrod Brown, a senior member of the Senate banking panel, said securities markets “require transparency and accountability, not one set of rules for insiders and another for the rest of us.”

A call for “transparency” has become popular with Congress and the establishment media since the economy collapsed, thanks in large part to Stanley Morgan, JP Morgan Chase, and especially Goldman Sachs and others from the financial criminal class on Wall Street.

The Federal Reserve has admitted the top banks own more than 50% of the GDP in the United States. In 2009, Illinois Democrat senator Dick Durbin engaged in a rare bit of candor when he said the banksters own the place. “And the banks — hard to believe in a time when we’re facing a banking crisis that many of the banks created — are still the most powerful lobby on Capitol Hill. And they frankly own the place,” he said during an interview on an Illinois radio station.

The Facebook scam is fairly straight forward, so even Congress can figure it out. It was a classic flip and hardly an abnormality in the “markets,” more accurately described as the biggest casino in the world. Everybody knows the house always wins. Despite this reality, millions of Americans can be counted on to rush like lemmings into the abyss.

In the weeks prior to the IPO, insiders grabbed up most of the shares – well over 200 million – at a remarkably cheap price . They later sold them to outsiders (called “retail investors”) who were mesmerized by the establishment media’s hype in the days leading up to the IPO.

The Insiders paid only 1.1% of the $38 offering price – remarkably low for an initial public offering – thanks to an underwriting discount arranged by Morgan Stanley. “Facebook insiders who sold in the offering not only got a high price for their shares, they got to keep an extraordinarily large portion of the proceeds,” writes Allan Sloan.

So angry were the duped, they immediately sued Facebook frontman Mark Zuckerberg, Goldman Sachs, and JPMorgan Chase, accusing them of concealing “a severe and pronounced reduction” in revenue growth forecasts and telling bank underwriters to “materially lower” their forecasts for the company. Lowered forecasts were revealed only to “preferred” investors.

“If Facebook told analysts to materially lower their forecasts, it should have told the entire market,” Antony Page, a professor at the Indiana University Robert H. McKinney School of Law, told Reuters. “We need to know what exactly was said to the analysts, and determine how different Facebook’s public story was from its private story.”

“The main underwriters in the middle of the road show reduced their estimates and didn’t tell everyone,” said Samuel Rudman, a partner at Robbins Geller Rudman & Dowd, which brought the lawsuit.

The class-action lawsuit filed in U.S. District Court in Manhattan seeks compensatory damages from Facebook, JP Morgan, Bank of America and Barclays. Another scammed investor has filed a lawsuit in California.

On Tuesday, Massachusetts Secretary of Commonwealth William Galvin issued a subpoena to Morgan Stanley. The Securities and Exchange Commission and the Financial Industry Regulatory Authority have also called for a review of the Facebook IPO.

It will take months before any action if any is taken in the case. In the meantime, Goldman Sachs and the other scamsters remain free to engage in more fraud and criminal predatory activity.


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