henry blodgett, ceo of business insider, a website. back in 2003 henry settled a civil securities charge with s.e.c. he was banned from the securities industry. he's a good friend of our show. henry, i say this because it's relevant to our discussion. you probably know more about this now than most people do. >> unfortunately. >> if no laws were broken, no regulations breached, and it's quite possible that's the case, this still has some kind of stink that makes investors think the system is stacked against them. >> that's right. this highlighted a set of rules that really are grossly unfair to individual investors. it was similar in my case. when i got in trouble analysts working closely with bankers and ipos after the dot-combust. that's ludicrous. we've got to change the rules. again, we've got to change the rules. in this situation facebook preannounced a lousy quarter. analysts not just morgan stanley but all found out about it and that was whispered to investors. individuals didn't know about it. it had an impact on what instituti

the second accusation, though, made by investor turned journalist henry blodgett and others is serious. that's that facebook executives allegedly signaled morgan stanley they set their expectations too high. that's not allowed. a company's not allowed to tell important financial news to one individual. it has to tell everybody. well, here's san franciscan john stump ringing the bell on the new york stock exchange. his first job on right was repo man for a bank. he's ceo of san francisco based wells fargo. >>> europe continues to worry the market. i've been talking a lot about europe. bring it home to palo alto. one-third of all of hewlett-packard's business comes from europe. guys, back to you. >> scott, thank you. concern over europe and the economy is also pushing oil prices lower. speculators betting an uncertain economy will cause less energy consumption. the price of a barrel of oil at a seven-month low down to 90. other commodities including gold plummeting. the dow has been down triple digits almost since the open. these are live pictures right now from the new york stock exchan

henry blodgett is the ceo of business insider, a website. back in 2003, henry handled a civil charge with the s.e.c., banned from the securities industry. he's a good friend of our show. and i say this because it's relevant to our discussion. you probably know more about this now than most people do. >> unfortunately. >> if no laws were broken and no regulations were breached, and it's quite possible that that's the case, this still has some kind of a stink that makes investors think the system's stacked against them. >> that's right. this has highlighted a set of rules that really are grossly unfair to individual investors. and it was actually similar in my case. when i got in trouble, it was analysts were working very closely with bankers on ipo as. after the dot-com bust, people said, that's ludicrous, and we changed the rules. and again this is a case where we've got to change the rules. because in this situation, facebook basically preannounced a lousy quarter. the underwriter analysts found out about it and that was whispered, effective

henry blodgett is the ceo of business insider. henry, good to see you on the program today. >> thank you. thank you for having me. >> i'd like to get to the issue what facebook should be at. let's tackle the morgan stanley question, if you will. i know you've lived through this a bit. you're at the center of the spitzer settlement with the wall street firms over the research a decade or so ago. there's supposed to be a chinese wall and the banking departments. i know you've clearly paid your price for that and there's no allegation that the analysts in this case did anything wrong, but how are you thinking about this this morning and how should investors be as well? >> i was shocked when i saw this. there were rumors of this last week and, frankly, when i first saw them i didn't believe them because it sounded preposterous and i've now been around the tech/ipo business, inside it and watching it on the outside. i have never heard of an underwriter analyst changing estimates in the middle of a road show before. so that's the first

henry blodgett joining us along with "squawk" master. on cnbc. >>> if you're just joining in, you're two hours too late. >> the facebook model relies on display ads sort of like google but doesn't have the same purchasing that google does. when you go to google, you're se seeking something out. facebook, you're looking at photos from your dad's fishing trip. i'm not convinced they can still grow this business in a way that still treats users well. >> you ask me what i'd buy, google 13 times earnings or apple at 11 times earnings or facebook at multiple revenues -- >> you can't really -- >> i would be inclined to go with lesser valued companies thinking value is more important than position. >> it's a powerful phenomena that doesn't show any signs of letting up. and can you say hi to a person not on facebook, that's a pretty strong statement. and development. some new members of the team will be introduced. the chairman emeritus will distribute his usual wisdom. and you? well, you're the chief life officer. you just need the right profess

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henry blodgett will be joining us to talk about his views, as well. steinburg is joining us of steinburg global asset management. and you say you have been hearing more than ever from clients lately what do i do with high money. what's sparking all of the concern? >> i think it's a number of things. one, interest rates are incredibly low. two -- >> so they can't find safety in the bond market? >> right. and they can't live off their cash flow. the second thing is people are starting to lose confidence again in the system. the jpmorgan new, the facebook debacle. and then most investors don't think about greece's impact or spanish bank's impact on the way that they live. and this will whole kind of move -- socialist movement that's sweeping through europe scares people. we're in a situation for individual investors that they don't know what to do. and they have to get some return on their money back. >> so where are you suggesting they go? >> i think you have to stay with this higher dividend strategy so that in the choppiness of the market, you can get

. >> we have henry blodgett joining us and steve ratner. stick around. we'll be back. ack.s when classroom teachers get the training... ...and support they need? schools flourish and students blossom. that's why programs like... ...the mickelson exxonmobil teachers academy... ...and astronaut sally ride's science academy are helping our educators improve student success in math and science. let's shoot for the stars. let's invest in our teachers and inspire our students. let's solve this. >>> the social offering of the century. business insider henry blodget goes behind the scenes. and why steven ratner says individual investors should watch facebook. >> and tom colburn says there's a way o keep from going broke. >> and huddle up to the trading block. the second hour of "squawk box" begins right now. ♪ >>> good morning, everybody. welcome back to "squawk box" on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. the head of the european rescue fund says the fund will continue support for greece as long as it sticks to its previously negotiated bailout agree

. >>> henry blodgett is a former wall street analyst who was permanently banned from the securities industry after settling fraud allegations with the s.e.c. savannah guthrie is "today's" legal correspondent. good morning to both of you. i'm sure you don't love being introduced that way, but you were banned after you were accused of giving assessments of stocks that did not jibe with the public assessment that merrill lynch was giving people. so you may be perfectly suited to discuss what happened here. what do you think happened? >> unfortunately, yes, it's horrible to hear that. but i think really what's going on hear is it's actually a big flashback to what happened then. what i got in trouble for was an industry system where analysts worked very closely with bankers on ipos, very involved after the dotcom crash. everybody said that's outrageous. so the rules are different. here i think morgan stanley is defending itself by saying we followed the rules. but the rules here are grossly unfair. and that's obvious to anybody. >> the analyst for the banks handling the ipo, according to reports