We’re starting to get a better picture of what happened with Facebook on Friday and in the run-up to its IPO, and it’s not pretty.

The repercussions have already begun, with a class-action lawsuit already filed against Facebook and Wall Street for misleading investors about the company’s prospects. You can bet the recrimination from participants won’t be too far behind.

It appears from what we know now that Facebook and its bankers selectively told big investors in the days before the IPO that the company’s outlook had dimmed but failed to tell mom and pop investors. That would be a serious problem if true.

Reuters has been leading on this story, reporting Saturday that Facebook had lowered its guidance during the IPO roadshow, “a rare and disruptive move.” Reuters followed that on Monday with a report that Morgan Stanley, the IPO’s lead underwriter, had lowered its earnings and revenue guidance for Facebook, as had underwriters Goldman Sachs and JPMorgan Chase.

Henry Blodget seized on the potential importance of these reports story and has been following them with a mix of gossipy reporting and first-hand expertise from his years as an analyst (and one who had an infamous run-in with the law). He wrote this yesterday morning:

So the fact that these analysts suddenly all cut their earnings forecasts at the same time, during the roadshow, and then this information was not passed on to the broader public, is a huge problem…

Selective dissemination of this sort could be a direct violation of securities laws. Irrespective of its legality, it is also grossly unfair. The SEC should investigate this immediately.

Underwriters may say that they were just responding to Facebook’s May 9 revision of its S-1 filing with the SEC. But while Facebook didn’t issue any new numbers in the S-1 revision, the analysts’ revisions were awfully similar.

Reuters reports now that four of the Facebook underwriters lowered estimates after the S-1 revision. Here’s the new and old revenue estimates:

Morgan Stanley — $4.854 billion (new)from $5.036 billion (old)

Bank of America — $4.815 billion (new) from $5.040 billion (old)

JPMorgan — $4.839 billion (new) from $5.044 billion (old)

Goldman Sachs — $4.852 billion (new) from $5.169 billion (old)

I suppose it’s just coincidence that these four analysts all ended up revising within 0.8 percent of each others’ revenue estimates.

Which is why Blodget’s reporting, though thinly sourced, makes sense. He writes that “One of the underwriter’s analysts has said he was told by a Facebook financial executive to cut his estimates.”

Who might that have been? The Wall Street Journal reports this morning that Facebook CFO David Ebersman micromanaged the IPO in an unusual manner.

The problem here is that institutional investors may have been getting one, relatively bearish message from inside the company while mom and pop investors (aka the dumb money) were still getting the bubble utopia message. One interesting but thinly sourced piece of Blodget’s report says:

Institutional investors, having digested the news of the underwriter estimate cut, were comfortable buying Facebook stock at $32 a share.

Retail investors, meanwhile, who were presumably unaware of the estimate cut, were comfortable buying Facebook at $40 a share.

Under this version of the story, it turns out, retail investors were rushing to buy Facebook shares. It was the institutional investors who had inside information who balked at the high price and sold.

If it turns out that Facebook told analysts about its weakened prospects without telling the broader public in its S-1, it should be in big-time trouble. CNBC’s John Carney:

If someone at Facebook did whisper in the ear of the underwriters’ analysts about the earnings, and those analysts then used this material, non-public information for the basis of rethinking their estimates, and the clients of the banks then altered their orders for Facebook shares while in possession of this information, we have the makings of an insider trading case.

The New York Times reports that Facebook held a conference call with analysts at its underwriters to “update their banks’ analysts on the business. Analysts at Morgan Stanley and other firms soon started advising clients to dial back their expectations.”

Regardless of whether anyone committed a crime, much less gets charged for one (don’t hold your breath), this ugly episode has shown very clearly how Wall Street, tech companies, and the venture capitalists who back them have been trying to inflate another bubble to enrich themselves. They were too incompetent this time to pull it off cleanly, as Audit contributor Felix Salmon shows in his “List of Incompetents,” but they did end up gouging plenty of folks.

If you were one of the suckers who bought at the open on Friday, you lost more than a quarter of your money in less than three trading days.

But the pace of the decline is what’s unusual about Facebook’s launch, not the decline itself. Here are the other major social-media (or social-ish) IPOs of the last year:

— Groupon: -55 percent since Novemeber

— Pandora: -43 percent since June

— Zynga: -28 percent since December

— Yelp: -28 percent since March

Only LinkedIn is trading above its bankers’ price level, up 7 percent since last May. And it’s not exactly a discount purchase with a price-to-earnings ratio of 627.

The rest of the above companies (except Facebook) don’t have P/E’s. They lose money.

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu.