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Facebook short sellers find friends in banks

Goldman Sachs and JP Morgan, who helped underwrite the Facebook IPO, were lending out shares hedge funds needed for short sales

As traders at Morgan Stanley were frantically trying to shore up Facebook's share price following the company's initial public offering, other managers on the deal were helping short sellers bet that the newly minted stock would fall.

Trading desks at Goldman Sachs and JP Morgan, two of the firms that helped Morgan Stanley underwrite the IPO, were among those lending out Facebook shares that hedge funds needed for short sales, according to people familiar with the matter.

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