Report: SEC Finds No Evidence That Facebook Withheld Information From Investors Pre-IPO

By David Cohen 

A source familiar with the Securities and Exchange Commission told Bloomberg that while the agency’s investigation of Facebook over its actions prior to its May 18 initial public offering is still ongoing, no evidence has been found that the social network withheld material information from investors.

Former SEC Lawyer and current Wayne State University Professor Peter Henning told Bloomberg:

It’s unlikely that the SEC will pursue an enforcement action against Facebook based on what they were discussing before the IPO. The SEC would have objected even more strenuously if the company had not complied. Facebook was doing its best to respond to the SEC by disclosing enough information.

According to Bloomberg, the SEC is still examining whether investors were harmed by misleading information from brokers, or by selective disclosures to analysts by Facebook’s underwriters regarding the social network’s prospects for mobile revenue.

Bloomberg said neither the SEC nor Facebook would comment.

Readers: What do you believe the SEC will end up deciding?