First, we learned Facebook's IPO underwriters had cut their estimates for the company in the middle of the IPO roadshow. What we didn't know was why. Now we know. The analysts cut their estimates because a Facebook exec who knew the business was weak told them to.
Facebook has ended its third trading day and the world is falling apart -- again. The stock closed Tuesday at $31, down 19% from the $38 IPO price, lead underwriter Morgan Stanley is under fire, the SEC is ready to investigate, and analysts are blaming everyone. Oh, and the fundamentals? Those haven't changed a bit.
Just as rumors of a merger with Borders Books began to fade, the bookseller is once again in the spotlight as a major stakeholder, Aletheia Research and Management, is embroiled in legal troubles and an SEC investigation.
On Sunday, money manager Stanley Chais died at age 84, still under investigation for his involvement with Bernard Madoff. Chais channeled large amounts of investors' money to the now-notorious Ponzi schemer, and over the years extracted more than $1 billion from Madoff's fund.
After a five-year investigation by the Securities and Exchange Commission, computer maker Dell agreed to pay a $100 million settlement to end civil charges of fraudulent accounting. The agency accuses Dell of pumping up its reported profits with undisclosed payments from Intel.
Dell is close to a finalizing a deal with the SEC over an accounting scandal, which would include founder and CEO Michael Dell facing allegations of fraud through negligence. Dell, however, is expected to remain as CEO and chairman of the company he founded.
Prosecutors are looking into a Goldman Sachs director's communications with hedge fund Galleon's Raj Rajaratnam, now on trial for insider trading. The ties revealed raise troubling questions about how widespread insider trading is.