One of the lead underwriters of Facebook's initial public offering (IPO) will pay $5 million in fines to settle the first regulatory action brought against Facebook financial backers who allegedly withheld information from public investors.

Morgan Stanley settled the case brought by the state of Massachusetts without denying or admitting any wrongdoing. "Morgan Stanley is committed to robust compliance with both the letter and the spirit of all applicable regulations and laws," a company spokesperson said in a press release.

According to court filings, the state alleged that a senior investment banker at Morgan Stanley instructed Facebook on how to selectively present revised revenue forecasts to Wall Street analysts, even going so far as to write most of the script used by Facebook to update analysts in circumvention of laws against underwriters directly influencing provided data. That gave Wall Street investors an illicit edge, according to the state of Massachusetts.

A Facebook spokesperson said the social networking company had no comment on the case.

Multiple class action lawsuits resulted from the May 18 IPO. The suits allege that Facebook provided false and misleading statements in documents filed with the Securities and Exchange Commission and made available to the public prior to the stock offering. In addition, according to the lawsuits, the company allegedly gave a private heads-up to lead underwriters, including Morgan Stanley and Goldman Sachs, who then decreased their revenue projections. The lawsuits allege that the underwriters told a handful of select investors about the change, but not the public.

Facebook stock was trading at around $26 on NASDAQ on Dec. 21; it had debuted eight months earlier at $42.05.

Are you receiving Express, our free daily e-mail edition? See a sample and sign-up for Express.