Goldman Sachs Says Facebook Offer Barred From US Investors, Blames NYT's For Making Plans Public
from the and-so-it-goes dept
The reality is a little more nuanced. The thing is, the SEC heavily regulates the IPO process, because (officially) it doesn't want companies to abuse the process, lie to investors, trick them into buying shares in something they don't understand or that's really much riskier, etc. We've discussed in the past, and years back, VentureBeat had a great article that noted many startups appeared to violate the basics of SEC regulations even in just saying they were raising money from private investors, because just talking about it publicly can be seen as a form of a "public offering." It seems that Goldman was becoming worried that all of the public scrutiny on this deal was suddenly getting mighty close to being a "public offering" type of situation, in which the SEC could conceivably step in and claim that it needs to follow all of the standard IPO rules -- which it had not been doing. Goldman has apparently hoped to keep everything a lot more quiet, but the NY Times broke the story, and then everyone else piled on.
The whole thing remains a little silly. This whole thing has been an effort to route around the regulations from the beginning, so this is just the latest piece of that, though it may serve to annoy a lot of American Goldman clients. In the end, it wouldn't surprise me to find out that many of them figure out offshore vehicles for getting in on this deal anyway.