Morgan Stanley is fined $5m for Facebook IPO disclosure (BBC)

Morgan Stanley has been fined $5m (£3m) by the Massachusetts securities regulator for "improperly influencing" analysts before Facebook's share sale.

According to the regulator, there was a conflict of interest when a senior banker coached a Facebook official on what to say to analysts.

It also claimed that the two firms failed to tell all investors that revenues may be lower than forecast.

Many investors criticised Facebook as its shares fell following the listing.

The sale, which was over-subscribed and took place in May 2012, was one of the most hotly anticipated stock floatations in recent history and valued the eight-year-old firm at $104bn.

Facebook sold close to 421 million shares, at $38 a share, raising $16bn.

However, the hype surrounding the listing waned shortly after trading started on the New York stock exchange as shares fell below their listing price on concerns about the pace of future profit growth.

Facebook's shares have dipped almost 30% since its listing in May.

Morgan Stanley did not confirm or deny the allegations by the regulator.

However, it said in statement that it was pleased to have reached a settlement and to have put the matter behind it.

"Morgan Stanley is committed to robust compliance with both the letter and the spirit of all applicable regulations and laws," it added.