NEW YORK — Almost four years after the financial crisis began, Wall Street still can't get it right.
Investor anger mounted Wednesday over the initial public offering of Facebook stock last week, which was fumbled by the banks that managed the deal and complicated by technical problems at the Nasdaq stock exchange.
Shareholders filed at least two lawsuits against Facebook and Morgan Stanley, the bank that shepherded the IPO, over reports that it withheld negative analyst reports about Facebook from some clients before the company went public.
It was the second stumble this month by a major Wall Street firm. JPMorgan Chase, usually revered for taming risk, has yet to contain a growing $2 billion loss in one of its trading units.
The missteps are further eroding the confidence of Main Street, or what was left of it after the financial meltdown of 2008, and reinforcing the sense that the game is rigged.
Judson Gee, a financial adviser in Charlotte, N.C., placed a call Wednesday morning to a client who had plowed $50,000 into Facebook stock on Friday, the day of the IPO.
Gee said he called to tell the client, a restaurateur, about reports that Morgan Stanley had told only select customers about an analyst's reduction of revenue estimates for Facebook just before the IPO.
"I could see his jaw dropping on the other side," Gee said. "A lot of expletives came out." He said his client had asked: "How can they give that information to the big boys and not give it to the public?"
In the final planning of the IPO, Facebook, working with Morgan Stanley, raised the total number of shares being offered for sale by 25 percent, to 421 million. They expected extraordinary demand for the stock by investors.
That appears to have been a miscalculation. Facebook stock jumped from $38 to as high as $45 in the opening minutes, but quickly sank toward $38 again. It dropped to about $34 on Monday and $31 on Tuesday. The stock recovered somewhat on Wednesday and climbed $1.
Dayna Steele, a motivational speaker in Houston, said she planned to wait and buy the stock "when everybody finishes suing each other."
The shareholder lawsuit, filed in federal court in Manhattan, accuses Morgan Stanley of withholding the negative analyst report from some clients while it prepared to take the stock public.
The first trading in Facebook stock, originally set for 11 a.m. Friday, was delayed half an hour by technical glitches at the Nasdaq Stock Market, and brokerages are still sorting through problems with orders.
A person familiar with the matter, speaking on condition of anonymity because the person was not authorized to speak publicly, said Facebook was in talks with the New York Stock Exchange to move its stock listing there from Nasdaq.
The bungled IPO came little more than a week after JPMorgan CEO Jamie Dimon disclosed the $2 billion loss.
He has said the bank was hedging against financial risk, but regulators have questioned whether it was a gamble for profit instead, and have seized on the loss to make the case that Wall Street has not cleaned up its act.
Lisa Lindsley, director of capital strategies for the American Federation of State, County and Municipal Employees, which has 1.6 million members and handles pension assets of $850 million, said the union was "very concerned about the lack of internal controls at all three firms," referring to Facebook, JPMorgan and Morgan Stanley.
Elizabeth Warren, architect of the Consumer Financial Protection Bureau and a Democratic candidate for Senate from Massachusetts, said Wall Street has lost an image that once said, "We are solid and we will be here forever."
"Banking should be boring," she said, "because boring creates confidence."
As if small investors needed a reason to feel queasier, the stock market is having its worst month of the year, mostly because of concerns about a debt crisis in Europe and whether Greece will exit the euro currency group.
The Dow Jones industrial average gained 9 percent during the first four months of the year, but that has withered to 2 percent.