Alexander Ryking

Massachusetts’ top securities regulator has subpoenaed Morgan Stanley related to allegations that it gave some clients negative information about Facebook before last week’s initial public offering.

In a statement Tuesday, Secretary of the Commonwealth William Galvin said his office is investigating whether Morgan Stanley selectively divulged to some clients that its analyst had cut his revenue estimate for Facebook. Morgan Stanley was the lead underwriter for Facebook’s IPO.

The analyst’s revision followed an amended filing by Facebook in which the company said a shift by many Facebook users toward mobile devices might limit its revenue growth.

CEOs of massive corporations are poised to secretly funnel millions of dollars from corporate coffers toward electing corporate candidates in 2012. Join our action to stop them now!

They want to keep their spending in the dark. Thankfully, the Securities and Exchange Commission has the authority to expose their hidden influence. But the SEC isn’t going to act without public pressure.

Tell the SEC: Shine sunlight on corporate spending in elections.

Finally the Securities and Exchange Commission has nailed an “a-list” target: Richard F. Syron, former chief executive of Freddie Mac. Make no mistake: this is political dynamite.

The fraud charges against Syron and other executives of Freddie Mac and the other government-sponsored mortgage-trader, Fannie Mae, who were charged with concealing subprime sludge from their shareholders, will fuel the right-wing narrative of the financial crisis. [Right-wingers] contend that Fannie and Freddie, not the banks, were responsible for the financial crisis by monopolizing the market for subprime loans that eventually went bust, dragging down the entire housing market. What this bogus argument ignores is that these two hated government-sponsored enterprises did not actually make loans, but just bought them after they were issued.

But let’s put aside the political hot potato for the moment. My focus is on Dick Syron. And my question to the SEC is this: What took you so long?

A federal judge angrily blocked Citigroup Inc’s proposed $285 million settlement over the sale of toxic mortgage debt, excoriating the top U.S. market regulator over how it reaches corporate fraud settlements.

U.S. District Judge Jed Rakoff in Manhattan said the U.S. Securities and Exchange Commission appeared uninterested in actually learning what Citigroup did wrong, and erred by asking him to ignore the interests of the public.

“An application of judicial power that does not rest on facts is worse than mindless, it is inherently dangerous,” Rakoff wrote in an opinion dated Monday.

The judge added that it was difficult to discern “from the limited information before the court what the SEC is getting from this settlement other than a quick headline.”

He said the proposed settlement was “neither reasonable, nor fair, nor adequate, nor in the public interest.”

With world markets suddenly sagging under the weight of the Standard & Poors downgrade of Treasury bonds last Friday, Senator Al Franken (D-MN) is disturbed by the monopolistic power of the ratings agencies — and still determined to curb their abuses, as he tried to do last year with an amendment to the Dodd-Frank banking reform bill.

In an exclusive Monday interview, the Minnesota Democrat said that the misconduct of the ratings agencies led directly to the economic catastrophe that S&P’s rating decision has now made even worse. Franken wondered aloud why his proposed reforms of the ratings industry should still be subject to “study” rather than action by the Securities and Exchange Commission.

By setting up an independent federal board to assign ratings jobs to the agencies — rather than letting them be paid by those who issue the securities they grade — his proposal would have severed the industry’s gross conflicts of interest. Known as the “issuer pays” model, that traditional relationship let the banks reward S&P and Moody’s for awarding rubber-stamp AAA ratings to worthless mortgage-backed securities (as they did for years before the housing bubble burst).

It was those abuses, he said, that left taxpayers, workers and government “holding the bag” while the bankers and ratings firms walked away with huge profits.