Facebook seems to have misrepresented itself to the Securities and Exchange Commission based on correspondence leading up to its May IPO, according to an article reported by Bloomberg News yesterday.
Two dozen letters posted to the SEC's website a month after the company went public indicate the social media company attempted to overstate the number of users of its mobile devices and cited the wrong research in its February 1 filing with the SEC.
When Barbara Jacobs, an assistant director for corporation finance at the SEC demanded Facebook produce the Nielsen study and consent for use of data regarding the effectiveness of its ads, after initial resistance and finally an ultimatum, Facebook took out the reference, which apparently had been linked to a marketing report, rather than Nielsen, according to Bloomberg.
Further, the letters show company executives held back "crucial details" relating to "whether it could make money from the soaring number of mobile users" before finally responding to pressure from the SEC, Bloomberg reported.
The letters, between SEC officials, Chief Financial Officer David Ebersman and Facebook's law firm Fenwick & West covered a period of two-and-a-half months leading up to the IPO.
The letters, "depict a Facebook management team hesitant to disclose information and still guessing at even rudimentary aspects of its business just weeks before the company held the largest-ever technology initial public offering," concluded Bloomberg News.
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