US investors prohibited
Source: Agencies |
January 19, 2011, Wednesday
|
Print Edition
Print Edition
GOLDMAN Sachs Group Inc has prohibited US investors from participating in a private offering expected to raise up to US$1.5 billion for social networking site Facebook, citing widespread media coverage that could run afoul of securities guidelines.
The investment bank said on Monday it decided to restrict the fund to prospective shareholders in Asia and Europe because it determined that the news coverage could be inconsistent with the laws that govern private placements.
In a statement, Goldman Sachs said it made the decision on its own and "believes this is the most prudent path to take."
Although Goldman Sachs did not specify which laws it was concerned about, the Securities and Exchange Commission has guidelines that regulate the amount of solicitation and publicity that is allowed in connection with a private placement.
The development comes after Goldman Sachs and a Russian investor invested US$500 million in the privately held social networking site earlier this month.
The bank set up the offshore fund, which initially was to have been available to investors in the United States.
Goldman Sachs has declined to specify when the offering may close.
The offering is expected to raise as much as US$1.5 billion for the privately held Facebook, which is the world's largest Internet social network.
The Wall Street Journal, which reported the decision to exclude US clients from the private offering on Monday, said about US$7 billion in orders have been received.
The investment bank said on Monday it decided to restrict the fund to prospective shareholders in Asia and Europe because it determined that the news coverage could be inconsistent with the laws that govern private placements.
In a statement, Goldman Sachs said it made the decision on its own and "believes this is the most prudent path to take."
Although Goldman Sachs did not specify which laws it was concerned about, the Securities and Exchange Commission has guidelines that regulate the amount of solicitation and publicity that is allowed in connection with a private placement.
The development comes after Goldman Sachs and a Russian investor invested US$500 million in the privately held social networking site earlier this month.
The bank set up the offshore fund, which initially was to have been available to investors in the United States.
Goldman Sachs has declined to specify when the offering may close.
The offering is expected to raise as much as US$1.5 billion for the privately held Facebook, which is the world's largest Internet social network.
The Wall Street Journal, which reported the decision to exclude US clients from the private offering on Monday, said about US$7 billion in orders have been received.
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