Lyft has threatened disputes with Morgan Stanley and accuses the firm of supporting short selling for investors who are subject to lock-up agreements.
Lift asked Morgan Stanley to say that they did not create such a product and that they had engaged in proper due diligence when marketing such a product.
The letter, which copied Lyft's leading underwriters JP Mor gan and Credit Suisse, also asks that if Morgan Stanley engaged in such activity that they immediately stop and redirect a list of shareholders who the ltok.
While the letter requested that Morgan Stanley respond by the end of the day on April 2, two sources near the case said that from the end of Friday, the company had not yet made it formal. Both people asked for anonymity and discussed private details that involved the dispute.
However, a Morgan Stanley spokesperson made a statement to CNBC, saying that the company "did not market or execute directly or indirectly a sale, short sale, hedge, swap, or transfer of risk or value associated with Lifting Shares for any Lift shareholder identified by the company or otherwise known to us to be subject to a lock agreement. "The information first stated that Lyft and its IPO syndicate had sent a letter to Morgan Stanley over their alleged role in creating special instruments for investors in the pre-IPO cards.
In the letter, Lyft said it was able to take legal action against Morgan Stanley and requested that the firm's turn over relevant documents ahead of potential litigation.
Lyft's advice believes that Morgan Stanley could be found to have engaged in tortical interference in the lock agreement if it was true that the firm actively tried to circumvent them.
Lift's shares fell as much as 1
"Our company has had activity in the normal course of marketing, and any suggestion that Morgan Stanley has engaged in an attempt to apply" short press "to Lyft is false," Morgan Stanley spokesman said.
Morgan Stanley's short sale was less than 1.3% of the total volume of Lyft, according to a person familiar with Morgan Stanley's business.
The only largest card deal performed on behalf of a client was 425,000 shares, said the person who asked not to be named discussing private details of the firm's trading activity.
The regulator for the financial industry, which is the self-regulating organization that patrols the banking industry, has already been engaged in the case, a person with knowledge of the matter said.
This may also fall under the domain of the Securities and Exchange Commission, although CNBC could not learn whether the SEC has started any discussions at this time.
The information previously reported that Finra has become involved in the case.
The dispute also comes as a long pipeline of technology companies waiting to make their own debut this year. Lift's rival Uber is set to be public in the coming months.
Morgan Stanley had won the coveted role of insuring Ubers IPO. The banks managing the agreement were also copied into the letter, which is remarkable because the creation of financial products for card sales will typically be done in another division of the firm – not within the investment bank.