Highlights from the article:

Although it is legal, this puts a bad face forward for potential investors and even users of the social network.

"Regardless of the legality of sharing inside information with institutional investors, this story is another example of how Facebook overlooks the importance of winning the affinity of the individual investor -- the regular guy," Josh Crandall of Netpop Research told the E-Commerce Times.

"People stop and ask themselves whether they can trust this company to look out for their needs and interests," he said. "From a long view, whether Facebook meets a quarter's revenue expectations isn't nearly as important as the negative impact this episode has on Facebook's brand."

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