And the overselling is where the real sleaziness comes in.
Just before Facebook went to market, it amended its paperwork in an oblique way seeming to reflect the fact that much of its most recent growth had been due to handheld wireless devices.
And when you combine the initial crazed overvaluation with the prospect of less-than-robust earnings promised, you have a bunch of nervous stock analysts. Nervous analysts often mean a stock goes down.
On top of all this, Morgan Stanley is under suspicion for informing only some of its most favored clients in advance, so they could limit their exposure. In addition, some close to the deal suspect that a Facebook insider alerted Morgan Stanley of the true significance of the pre-IPO paperwok change.If that is true, it's another major violation of SEC regulations.
Even by Wall Street standards, as widely reported, Facebook has a shady history. Harvard classmates who said company founder Mark Zuckerberg ripped off their social-networking idea reached an out-of-court settlement with Facebook in 2008.
And e-mails have been made public suggesting that Zuckerberg considered early Facebook users as "Dumb fucks."
In many ways, Morgan Stanley and Facebook deserve each other. But how about the rest of us? Users? Consumers? Investors?
We don't have any bright ideas about policing the Zuckerbergs of the world. But as for the financiers and investment bankers, strong measures are clearly called for immediately. (It should be noted that, despite promises to make financial reform a centerpiece of this then new administration, Barack Obama has done very little to effectuate any such reform, and not a single player in the meltdown has been prosecuted.)
We have a modest suggestion: at noon every Friday, crucify a bank executive in Manhattan at the corner of Wall Street and Broad.
After a few weeks, the financial community should get the message.