MORGAN Stanley and other underwriters of Facebook’s initial public offering do not have to disgorge short-swing profits made on the deal, a federal appeals court ruled Thursday.
The U.S. Court of Appeals for the Second Circuit affirmed that standard lock-up agreements barring the sale of a newly issued stock for six months do not render underwriters and certain pre-IPO shareholders in Facebook stock a “group” subject to disgorgement under the Securities Exchange Act of 1934.
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