Did certain people have inside information ahead of Facebook's stock offering last week? The IPO is the focus of a lawsuit against Facebook, its executives, and Morgan Stanley, on behalf of purchasers of Facebook stock.
The complaint alleges the two companies misled investors by failing to disclose that Facebook's revenue growth was down.
Not only is the stock down almost 20 percent, but now there are serious questions of fairness.
"What we allege is that the registration statement prepared in connection with the IPO was materially false and misleading because it failed to disclose a slowdown in revenue growth due to more people accessing Facebook on their mobile devices," explained Sam Rudman, an attorney for the plaintiffs in the Facebook lawsuit.
"If we continue to use it on the mobile phone, then we are less likely to click on the ads, and that's the big threat for them," Ben Venkatramen, a professor at Boston University's School of Management, said.
U.S. regulators want to know if big time investors at Morgan Stanley were tipped off about a negative report on Facebook's finances -- information regular investors did not get.
"Did all prospective investors get all the same information at the same time?" Mass. Secretary of State William Galvin asked. "Or were there certain preferred investors given special information which gave them an advantage or an edge here?"
Galvin has subpoenaed Morgan Stanley in hopes of finding the answers to those questions.
"If people with more power and money to invest got a different set of facts and information and analysis than the average retail investor, than yeah -- that's troubling," said Jason Tanz, the senior business editor of Wired.
If investors had access to privileged information, they might have known to sell the stock before others did.
"You have a bunch of parties misled, and then they suddenly found themselves on Friday with something they bought at $38 which was rapidly dropping in value," Tiernan Ray, senior editor at Barrons, said.
Regulators may also be asking if Facebook sold 25 percent more stock than they originally told the public they would. That could have prevented the stock from jumping in price on its first day of trading.
"If we're trying to get retail investors back in the marketplace, then we have to assure them that it's fair," Galvin said.
Galvin believes a quick, thorough investigation is mandatory for the sake of all investors.
Two Congressional panels -- the Senate Banking Committee and the House Financial Services Committee -- are also reviewing Facebook's high-profile stock offering.