Goldman Limits Facebook Investment to Foreign Clients because of SEC/NYT

http://dealbook.nytimes.com/2011/01/17/goldman-limits-facebook-investment-to-foreign-clients

by ramanujan • 16 years ago

20 6 16 years ago

dealbook.nytimes.com

beoba• 16 years ago

It's such a bad deal that it's already been banned.

pyre• 16 years ago

I missed that part of the article. It seems like they are afraid that all of the media attention would qualify as 'advertisement' which they are not allowed to do. That has nothing to do with how good/bad the deal is.

shareme• 16 years ago

Something is wrong. SEC review will happen no matter if the investors are US or not, hence it snot the real reason obviously.

Question what is the difference banking laws wise if its non US institutional investors compared to US institution investors? Remember GS is now bank holding company thus it might nor be SEC but bank holding laws influencing the change..

Or it may be that non-US investors balked at US media coverage and GS hopes to duck that coverage in the future..

mdda• 16 years ago

IANAL, but: Banking law isn't relevant here : This is to do with offerings of securities.

The SEC regulates offerings in the US. Goldman is no longer offering these securities in the US, so the SEC is not involved.

As someone else points out, if a US client seriously wants to jump through hoops to invest, I'm sure Goldman would help out an offshore entity.

gatsby• 16 years ago

This will have no impact on the American Goldman client who's eager to invest in Facebook. US Goldman investors with the ability to put several million dollars into FB won't mind: they likely own existing foreign investment accounts/vehicles, and are excited that the SEC won't have any control over their investment.

I applaud the NY Times for their scrutiny over the past few weeks, but it's naive to think they're stopping US investment.

joseacta• 16 years ago

I think it might be a way from them to put some pressure to the SEC.

1. GS is taxpayer subsidize (To Big To Fail) company. As they're a bank holding company, they can tap funds from the Feds at a very low rate. Because of this, they can make deals with an enormous amount of risk, and not care. If it fails, and cash is needed, just tap the funds.

2. The contract between GS and investors, explicitly says that GS can sell their stake on Facebook without informing investor. A clear sign of the risk associated with the deal. http://www.bloomberg.com/news/2011-01-06/goldman-sachs-discl...

3. The SEC can't do nothing about this. There's no law that prohibits GS to do this. Instead, SEC is looking for an alternative to block the deal, as the 500 investor limit: http://dealbook.nytimes.com/2011/01/03/facebook-and-the-500-...

4. GS takes advantage of the media attention to the case says it will limit investments to foreign clients. It's like saying: hey, the SEC is trying to block the deal at all costs, so instead, we won't support american investors and give priority to foreigners as the international community is more open to investment and risk taking.

Goldman Limits Facebook Investment to Foreign Clients because of SEC/NYT

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