Regulators are examining whether Morgan Stanley, the investment bank that shepherded Facebook through its stock market flotation last week, selectively informed clients of an analyst's negative report about the company before the shares started trading.
Rick Ketchum, head of the Financial Industry Regulatory Authority, the self-policing body for the securities industry, said the question is "a matter of regulatory concern" for his organisation and the Securities and Exchange Commission.
The top securities regulator for Massachusetts, William Galvin, said he had subpoenaed Morgan Stanley.
He said his office is investigating whether Morgan Stanley divulged to only some clients that one of its analysts had cut his revenue estimates for Facebook before the stock hit the market on Friday.
The bank said yesterday that it "followed the same procedures for the Facebook offering that it follows for all IPOs" - initial public offerings of stock. It said its procedures complied with regulations.
The questions about the role played by Morgan Stanley, the lead underwriter for the deal, add to the confusion surrounding Facebook's IPO. In the most hotly anticipated stock debut in years, the offering raised $16bn (€12.53bn) for the social networking company, valuing it at $104bn (€81.44bn).
Yesterday, Robert Greifeld, chief executive of the Nasdaq Stock Market, acknowledged to shareholders of Nasdaq's parent company that "clearly we had mistakes within the Facebook listing".
The stock debut, originally set for 11am EDT on Friday, was delayed for more than half an hour because of technical problems at Nasdaq. Some brokerages were still sorting out the aftermath yesterday.
"Unfortunately, our clients continue to feel the effects of this in some cases," said Stephen Austin, a spokesman for Fidelity Investments, one of the country's largest brokerages. Fidelity was still waiting for some Facebook stock orders that it placed on Friday to be executed. Fidelity's systems had performed normally, Mr Austin said.
In the meantime, Facebook stock itself has been a disappointment. It fell $3.03 yesterday to close at $31 and has now fallen $7, or more than 18%, from its offering price of $38. It managed to add just 23 cents in its first hours of trading on Friday, then suffered a big decline on Monday.
The Reuters news service reported yesterday that a Morgan Stanley analyst, Scott Devitt, cut his estimate for Facebook's revenue this year to $4.85bn (€3.79bn) from more than $5bn (€3.9bn) earlier.
Reuters reported that it was unclear whether Morgan Stanley had told only select clients about the reduced estimate.
Reuters reported that the analyst cut his figures for Facebook while the company's executives, including founder and chief executive Mark Zuckerberg, were shopping the stock to potential investors in the weeks ahead of the IPO, a process known in investing as a "road show".
Morgan Stanley, in its statement, did not specifically address which clients might have been told about a reduced estimate from one of its analysts.
It said "a significant number" of analysts, including those from other firms underwriting the stock issue, had reduced their estimates for Facebook to reflect publicly available information about the company.
That was a reference to a May 9 regulatory filing in which Facebook said a shift by many users toward mobile devices might limit its revenue growth.
Social media companies have struggled to make as much money as they would like from mobile advertising. Advertising accounts for more than 80% of Facebook's overall revenue.
Morgan Stanley also said revised analyst views were taken into account in setting the stock offering price at $38 per share. Facebook, working with Morgan Stanley, first set a range of $28 to $35 for the offering price, then raised the range to $34 to $38 before setting it at $38 on the night before the IPO.
When the stock started trading on Friday, it jumped several dollars, but quickly fell back towards $38.
It never crossed below that level on its first day, and outside analysts said that was probably because Morgan Stanley, eager to avoid the embarrassment of a first-day decline in the stock price, had rushed in with thousands of buy orders at $38.
The Wall Street Journal reported last night that Facebook's chief financial officer, David Ebersman, decided shortly before the stock debut to raise the number of shares the company would offer by 25%.
The Journal, citing people familiar with the planning of the stock offering, also reported that Morgan Stanley had assured Mr Ebersman there was plenty of demand for the stock.
A spokesman for Facebook, which is based in Menlo Park, California, said the company had no comment.
The SEC had already said on Friday that it was looking into problems surrounding the IPO.
Yesterday, the agency's chairman, Mary Schapiro, said: "I think there is a lot of reason to have confidence in our markets and in the integrity of how they operate, but there are issues that we need to look at specifically with respect to Facebook."