Regulators are examining whether Morgan Stanley, the investment bank that shepherded Facebook through its highly publicized stock offering last week, selectively informed clients of an analyst's negative report about the company before the stock started trading.

Rick Ketchum, the head of the Financial Industry Regulatory Authority, the self-policing body for the securities industry, said Tuesday that the question is "a matter of regulatory concern" for his organization and the Securities and Exchange Commission.

The top securities regulator for Massachusetts, William Galvin, said he had subpoenaed Morgan Stanley. Galvin said his office is investigating whether Morgan Stanley divulged to only some clients that one of its analysts had cut his revenue estimates for Facebook before the stock hit the market on Friday.

The bank said late Tuesday that it "followed the same procedures for the Facebook offering that it follows for all IPOs," referring to initial public offerings of stock. It said that its procedures complied with regulations.

The questions about the role played by Morgan Stanley, the lead underwriter for the deal, add to the confusion surrounding Facebook's IPO. In the most hotly anticipated stock debut in years, the offering raised $16 billion for the social networking company, valuing it at $104 billion.

Law firms are finally starting to recover from the recession, but they aren't taking their young lawyers along for the ride.

Even as profits return, cautious partners with one eye on damaged balance sheets and the other on stingy clients plan to hang onto the lean silhouettes they acquired during the downturn.

That means little relief for young associates—who took on hefty law-school loans, only to run into layoffs and stagnant pay in the years since 2008—and fewer chances for new law-school graduates to get in on the ground floor. And the elusive brass ring of partnership has grown more remote.

"What happens if Greece falls apart again?" says Greg Nitzkowski, managing partner at Paul Hastings LLP, an international firm that has reduced entry-level hires by about a third since 2008. "We just think it's prudent to plan as if this coming year is going to be a relatively flat year.…We're not planning for a big upsurge in demand."

Conditions at law firms have stabilized since 2009, when the legal industry shed 41,900 positions, according to the Labor Department. Cuts were more moderate last year, with some 2,700 positions eliminated, and recruiters report more opportunities for experienced midlevel associates.

But many elite firms have shrunk their ranks of entry-level lawyers by as much as half from 2008, when market turmoil was at its peak. Salaries and bonuses for those associates have remained generally flat. Meanwhile, a degree at a top law school can cost $100,000 or more.

Associates at prominent law firms say some of their peers hired during the boom years are happy just to have jobs at all. "The world has changed," says a senior associate at a top firm.

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A Chinese court has upheld the drug trafficking conviction of a Filipino man and set his execution for next week despite appeals for clemency from the Philippine president, officials said Wednesday.

The 35-year-old man, who was not identified, was arrested in September 2008 at Guilin International Airport in southern China while trying to smuggle 3.3 pounds of heroin into Guangxi province from Malaysia, the Philippine Department of Foreign Affairs said.

Smuggling more than 50 grams of heroin or other drugs is punishable by death in China.

Philippine officials based in China were told Monday that the Supreme People's Court in Beijing had upheld a lower court's decision to impose the death penalty on the Filipino man and that a Dec. 8 execution date had been set, the department said.

The Philippine government provided all possible help to the condemned man and made "sustained and exhaustive representations with the Chinese government at all levels," including an appeal from President Benigno Aquino III to his Chinese counterpart, Hu Jintao, to try to have the death sentence commuted to life in prison, officials said.

It used to be that the only thing lawyers tried to recruit was new clients. But these days, seemingly every firm has a group of attorneys pushing to bring aboard something else entirely: iPhones. And they want them badly.

"I have probably 15 people who continue to e-mail me about it," says the IT director at an Am Law 100 firm who asked not to be identified. "This one attorney, he goes out and finds someone who says he can solve any iPhone problem for $175," he says. "These attorneys, they want this thing so much, they are off trying to solve my problems. God bless them, but they don't know what they're doing."

The issue isn't technical. It's relatively simple to hook an iPhone into a corporate network, since it can use the same Microsoft Exchange Server that most firms already use for their BlackBerrys. Instead, IT directors' reluctance boils down to this: The BlackBerry was designed from the ground up to do one thing: transmit e-mail securely. Other features have been tacked onto newer models, but robust, secure, immediate e-mail was -- and is -- at the BlackBerry's core. The iPhone, on the other hand, is more of a consumer device with e-mail tacked on. Law firms shied away from the iPhone because it couldn't match the BlackBerry on security. And security -- well, that's at the core of a law firm IT director's job. "The original iPhone and the later 3G model had no local encryption, which meant that everything on the device was stored in clear text," says the IT director. "The simple passcodes many users had -- if they used any passcode at all -- could be hacked, and then everything would be viewable. We told our attorneys this was a deal-breaker."

But with the release of the latest iPhone, the 3GS, along with the new iPhone 3.0 operating system, the platform is looking more business-friendly. Forget about the consumer-oriented enhancements (like the upgraded camera on the 3GS, capable of shooting video). The real story, at least for law firms, is the vast array of enterprise-focused improvements. The 3GS phone now has local encryption along with more memory (up to 32 gigabytes) and a faster processor. And with the 3.0 OS, law firms running Exchange can require the use of strong passwords (the complicated ones, with numbers and letters, that no one except IT administrators want to take the time to create and use) and remotely wipe devices that have been lost or stolen. Users get a long-awaited, cut-copy-paste feature (a glaring omission on the iPhone until now), a landscape keyboard option for easier typing, and the ability to search the "from," "to," and "subject" headers (but not, alas, the body) on their e-mail, as well as their iPhone contact list, calendar and notes.

Jobs in President Barack Obama's Cabinet come with a pay cut for some of his appointees, who made millions from investments and lucrative careers in law, lobbying and business before joining his administration, according to financial reports the government released Tuesday.

At least one must sell stock to avoid potential conflicts of interest.

Obama's choice for deputy defense secretary, William J. Lynn, until recently a lobbyist for military contractor Raytheon, holds Raytheon incentive stock valued at $500,001 to $1 million, the documents show. The stock is due to vest next month. He has Raytheon "unvested restricted stock" worth $250,001 to $500,000.

Lynn has said he will sell the stock. He received a salary of $369,615 last year as a Raytheon senior vice president, and is expecting a 2008 cash bonus of $100,001 to $250,000 to be paid this March, his report shows. Obama has given Lynn a waiver from ethics rules banning employees from taking part in decisions related to their former employers for two years and prohibiting them from taking jobs in agencies they recently lobbied. If he is confirmed as expected, Lynn will be subject to ethics reviews for one year.

Government ethics rules require senior administration officials to provide details annually on their personal finances. The reports include descriptions of assets, income and debt — typically given in ranges rather than exact amounts — and lists of gifts and any outside positions. The disclosures are intended to shine a light on and help avoid any potential conflicts of interest.

The report for Obama's nominee to become attorney general, Eric Holder, shows he received $3.3 million, including deferred compensation, as a partner at the law firm Covington & Burling, far more than the $196,700 he would make as a member of Obama's Cabinet. He anticipates receiving a $1 million to $5 million partner separation payment when he leaves the firm.

Senate Democrats on Tuesday subpoenaed Attorney General Michael Mukasey for testimony and documents about the Justice Department's legal advice to the White House on detention and interrogation policies since the 9/11 terrorist attacks.

Senate Judiciary Committee Chairman Patrick Leahy, D-Vt., complained to Mukasey that after five years of efforts to glean the information, the committee still has seen only a fraction of the documents it is seeking.

"There is no legitimate argument for withholding the requested materials from this committee," Leahy wrote in a letter to Mukasey that accompanied the subpoena.

The Justice Department blasted the subpoena as a partisan move.

"We have worked in good faith over the past several months to see that the Judiciary Committee's legitimate oversight requests were being met in a manner consistent with the Justice Department's equally legitimate and long-standing need to provide confidential legal advice within the executive branch," department spokesman Brian Roehrkasse said. "We will now assess our next steps."