SEC Scrutiny Killed Goldman Sachs U.S. Facebook Deal
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Earlier today, the Wall Street Journal reported that Goldman Sachs (NYSE: GS) told U.S. clients they won't be offered a piece of the $1.5 billion Facebook private offering citing "intense media attention."
According to Fox Business Network's senior correspondent Charlie Gasparino, Goldman Sachs killed the U.S. Facebook deal because of increased SEC scrutiny.
"Goldman Sachs is killing this deal as the SEC is ramping up the scrutiny of this deal and other deals like it," Gasparino said.
"The SEC is investigating if Facebook breached the 500 rule not just now but possibly in the past. The 500 rule says you have to have 500 investors. If you have more than 500, you have got to go public or do these public filings as if you are public."
While Goldman Sachs said it was their decision to pull the deal, Gasparino said this may not exactly the case. "This is the SEC saying they don't like this deal and Goldman finally reading the tea leaves," he said.
Goldman Sachs will still offer clients outside the U.S. part of the Facebook private offering. This could raise more public scrutiny as many hedge funds are registered outside the U.S. and may be offered part of the deal. If media attention starts to focus on this part of the story then Goldman could have more negative publicity placed on it.
According to Fox Business Network's senior correspondent Charlie Gasparino, Goldman Sachs killed the U.S. Facebook deal because of increased SEC scrutiny.
"Goldman Sachs is killing this deal as the SEC is ramping up the scrutiny of this deal and other deals like it," Gasparino said.
"The SEC is investigating if Facebook breached the 500 rule not just now but possibly in the past. The 500 rule says you have to have 500 investors. If you have more than 500, you have got to go public or do these public filings as if you are public."
While Goldman Sachs said it was their decision to pull the deal, Gasparino said this may not exactly the case. "This is the SEC saying they don't like this deal and Goldman finally reading the tea leaves," he said.
Goldman Sachs will still offer clients outside the U.S. part of the Facebook private offering. This could raise more public scrutiny as many hedge funds are registered outside the U.S. and may be offered part of the deal. If media attention starts to focus on this part of the story then Goldman could have more negative publicity placed on it.
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