Facebook sued by investors over flotation The Californian company and banks, including Morgan Stanley and Goldman Sachs, are accused of failing to let all potential investors know that the banks had cut their revenue estimates for Facebook in advance of the shares launch. The two lawsuits filed on Wednesday followed reports that only major potential investors were told about the reductions that analysts at the banks made during Facebook's fortnight-long sales pitch to hopeful shareholders. "Some insiders and investors were preferred over others," said Darren Robbins, a lawyer for one set of retail investors who have filed a suit in a New York court on Wednesday. Everyone made money in this process, but it was the ordinary main street investor who was left holding the bag. The investors claim they have lost $2.5bn (£1.6bn from buying shares in the world's largest social networking site. The spate of legal action is the latest blow to a $104bn initial public offering that last week saw investors scrambling to own a slice of a company that has reshaped how almost one billion people communicate online The powerful Senate Banking Commitee on Wednesday indicated that it will now review allegations that have already drawn scrutiny from the Securities and Exchange Commission and the Financial Industry Regulatory Authority. The state of Massachusetts, home to several asset management companies, is already investigating what disclosures were made and when. Morgan Stanley, Facebook's chief adviser on the float, said that the reduction its analyst and those of other banks made were "taken into account in the pricing of the IPO." The Wall Street bank and other advisers on the float, including JPMorgan Chase and Barclays, shared fees of $176m from the IPO that saw Facebook and its early investors pocket about $16bn. Morgan Stanley and some of the other underwriters may also have reaped profits of about $100m from helping to prop up the shares on their first troubled day of trading.