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Wednesday, January 5, 2011

As usual: SEC is late to the game

Following up on the seemingly unfair 'Private IPO' for Goldman Sachs clients, the SEC has started to investigate...

The SEC Might Change The Rules To Prevent More Deals Like Goldman-Facebook
(Business Insider)
The Securities and Exchange Commission is investigating whether new rules are needed to close the loophole behind Goldman Sachs's $2 billion investment in Facebook, The Wall Street Journal reports.

Goldman is only putting $500 million of its own money into the company. The remaining $1.5 billion is being offered up to wealthy Goldman clients investing at least $2 million each.

These investors will technically be investing in a Goldman vehicle backed by Facebook shares rather than buying the shares directly. As a result, they won't count toward the 500 shareholder limit, beyond which Facebook would have to disclose detailed financials like a publicly traded company.

According to the Journal, the SEC is in the early stages of a review of this policy, and recent deals like Goldman-Facebook which get around it.

Good thing they made those IPO changes...

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