Lyft allegedly threatened with a lawsuit against Morgan Stanley in a letter to the investment bank on Tuesday accusing the company of supporting short-selling for investors who are subject to lock-up agreements.
In the letter, Lyft questioned the company about its alleged role in marketing certain products that would help investors prior to the IPO, according to a CNBC report citing the letter and unidentified sources. The letter was signed by lawyer Stris & Maher as lawyer for Lyft by Peter Stris, CNBC reported.
Lyft and Stris & Maher did not respond to comment requests.
Developments follow the announcement of the New York Post on Monday that Morgan Stanley had purposely helped prevent stock market decline despite the so-called "lock" before the IPO protect-up agreements to prevent them from doing so. Morgan Stanley is the lead underwriter for the upcoming IPO of Uber ̵
The Post also reported that the lock-up agreements were written in such a way that Lyft Investors could make limited "short" bets. Short sellers are investors who bet Lyft will lose value.
According to CNBC, Morgan Stanley did not formally answer the letter.
However, in a statement to FOX Business, a spokesman for Morgan Stanley denied the direct or indirect execution of any sale, short sale, hedging, hedge, or risk transfer associated with Lyft Shares in association with Lyft Shareholders for other reasons, to be the subject of a Lyft-Lock-up agreement.
"The operation of our company was in the normal context of market-making and any proposal that Morgan Stanley has made to apply for" Short press on Lyft is wrong, "the spokesman said.
The information was First reported on the threat of legal action by Lyft.
| LYFT INC The company had a value of approximately $ 24 billion and was $ 87.24 for the first time at the end of March, well above $ 72 a share, and was one of the year's most anticipated IPOs, closing at $ 74.45 a share on Friday  CLICK HERE TO OBTAIN THE FOX BUSINESS APP