Facebook underwriters holding the price with green shoe
ftalphaville.ft.com
ftalphaville.ft.com
The SEC currently does not require that underwriters publicly report
their short positions nor short-covering transactions. Investors who
are unwary of underwriter stabilizing activity who choose to invest in
what they perceive to be a stable issue can encounter volatility
when the underwriters pause or complete any stabilizing activity.
"Cast in the most negative light, price stabilization might be seen
as a means of transferring risk to a relatively naïve segment of
the investor population."
How is this allowed by the SEC?