(Reuters) - Two top U.S. financial regulators said on Tuesday the issues around the initial public offering of Facebook should be reviewed, putting fresh pressure on the company, its lead underwriter, Morgan Stanley, and the Nasdaq stock exchange.

Facebook shares closed 8.9 percent lower at $31, following an 11 percent plunge on Monday. At that price the company has shed more than $19 billion in market capitalization from its $38-per-share offering price last week.

Reuters reported late Monday that the consumer Internet analyst at lead underwriter Morgan Stanley cut his revenue forecasts for Facebook in the days before the offering, information that was not disclosed to the market before the stock was listed.

Facebook itself had urged analysts working for some of the 33 underwriters to lower their estimates ahead of the IPO, according to four sources with direct knowledge of the conversations that were held during the week prior to the IPO.

"Facebook changed the numbers. They didn't forecast their business right and they changed their numbers and told analysts," said another source at one of the underwriters with knowledge of the situation

The company had issued a revised prospectus on May 9 in which it cautioned about the possible negative impact of Facebook users shifting to mobile platforms, but the vague language fell well short of an explicit warning of lower revenues or earnings. Facebook has yet to make much revenue from mobile advertising.

The disclosure of lower forecasts to certain big institutional investors left both Facebook and Morgan Stanley open to accusations of selective disclosure. Many smaller investors who bought Facebook shares in the IPO were left in the dark.

A Facebook spokesman declined to comment.

"Morgan Stanley followed the same procedures for the Facebook offering that it follows for all IPOs," Morgan Stanley spokesman Pen Pendleton said in a statement. "These procedures are in compliance with all applicable regulations."

JPMorgan Chase and Goldman Sachs, which were also lead underwriters on the deal, and another underwriter, Bank of America Merrill Lynch, also all revised their estimates during Facebook's IPO roadshow, according to sources familiar with the situation.

The new estimates showed reductions in revenue and earnings projections for both the second quarter of 2012 and the full year, according to detailed figures reviewed by Reuters.

The issue of selective disclosure drew the attention of the main regulator of U.S. brokerages.

"That's a matter of regulatory concern to us and I'm sure to the SEC," said Richard Ketchum, the Financial Industry Regulatory Authority's chairman and chief executive. "And without saying whether it's us or the SEC, we will collectively be focusing on it.

Securities and Exchange Commission Chairman Mary Schapiro said investors should be confident in investing, but she conceded there were questions to answer as well.

"I think there is a lot of reason to have confidence in our markets and in the integrity of how they operate, but there are issues that we need to look at specifically with respect to Facebook," she told reporters as she exited a Senate Banking Committee hearing.

The state of Massachusetts also said it would examine the issues. Secretary of Commonwealth William Galvin issued a subpoena to Morgan Stanley in connection with its analyst's discussions with investors about Facebook.

A Los Angeles law firm filed a lawsuit seeking class action status against Facebook and its underwriters alleging inadequate disclosure of key information.

The legal issues surrounding the disclosure obligations of a pre-public company and its underwriters are murky, securities lawyers said. Public companies are subject to a rule known as Regulation Fair Disclosure, which requires that material information be disclosed to all investors at the same time.

But that rule would not apply to information that Facebook provided to its underwriters before it went public, according to securities law experts. Underwriters also may not have a legal obligation to disclose their proprietary research to all clients at the same time.

Adam Pritchard, a securities law professor at the University of Michigan and a former SEC enforcement attorney, said that in general, information disseminated pre-IPO cannot be inconsistent with what is provided in the prospectus. But Pritchard added that there is a big exception to these so-called "gun-jumping rules" for oral communications.

Facebook's guidance to analysts, and the subsequent revised estimates communicated to some investors, were delivered in telephone calls and conference calls rather than emails or written reports, the sources said. The conversations took place shortly after Facebook filed its revised prospectus.

The legal subtleties, though, did little to ease the anger of some investors and brokers who say the Facebook IPO now stands as an ugly example of a system rigged against the little guy.

"Night and day the institutional clients get things that we don't get," said a Morgan Stanley Smith Barney adviser who works with retail clients. "It's a huge issue for the entire industry."

STILL OVERVALUED?

With the stock falling on Tuesday, a debate continued over what the social networking company is really worth. Even with the company valued at about $85 billion at the market close Tuesday, compared with $104 billion at its IPO price, some experts say it is overvalued.

Thomson Reuters Starmine conservatively estimates a 10.8 percent annual growth rate - almost exactly the mean for the technology sector. On that basis, Starmine says the stock could be valued at $9.59 a share, a 72 percent discount to its IPO price.

Similarly, the company's price-to-earnings ratio remains lofty, even after the selloff. The $31 price implies a P/E of 60 for expected 2012 results, compared with Google's 13.3 for a similar rate of growth.

With Facebook shares not yet available for borrowing and thus all but impossible to sell short, bearish investors have sought out almost any related vehicle to bet against Facebook. Over the past three trading days, prices plunged on two closed-end funds that owned pre-IPO shares. Firsthand Technology Value Fund and GSV Capital Corp both dropped more than 25 percent even though their Facebook holdings make up only a small fraction of assets.

"Until investors can actually short Facebook, they have to keep shorting other things that can give them some sort of proxy for Facebook," said Thomas Vandeventer, manager of the Tocqueville Opportunity Fund, which owns shares of both the battered closed-end funds.

Brokers who over-ordered shares in the expectation that supply would be limited continued to complain they received too much stock to handle and were left in the dark about forecast changes.

Some big investors, though, protected themselves well. In a securities filing on Tuesday, Microsoft disclosed that it had sold 6.5 million shares at $37.58, meaning the software giant covered the cost of its original investment of 32.8 million shares for just $240 million in 2007, while still retaining most of the stake.

WEIGHING ON NASDAQ

Besides the pressure on Facebook and on Morgan Stanley, there is also an intense focus on Nasdaq OMX Group Inc, which has shouldered much of the blame for the trading failures that market participants believe contributed to the weak performance of Facebook shares on its debut on Friday.

A technical glitch delayed Facebook's market debut by roughly half an hour, and later delayed order confirmations.

The exchange has set aside money to compensate customers, but some on Wall Street are warning its ability to snag future big IPOs is at risk. Meanwhile, a suit filed late Tuesday in Manhattan federal court seeks class-action status for anyone who lost money due to Nasdaq mishandling an order.

"It's dreadful for the markets," former SEC Chairman Arthur Levitt said of the IPO and its handling by banks and Nasdaq. "It's an event with long-lasting negative implications for an industry that can ill afford this kind of blemish, and the last chapter hasn't been written. Nobody looks good here."

But Nasdaq shareholders gave the company a pass on Tuesday.

At the exchange operator's annual meeting, which only lasted a few minutes, top executives did not get any questions about what went wrong with Facebook or what they were doing to correct it.

"While clearly we had mistakes in the Facebook listing, we still want to highlight the fact that it was the largest IPO ever and on Friday of last week, we processed over 570 million shares," Nasdaq Chief Executive Bob Greifeld said at the shareholder meeting.