Goldman Sachs is to exclude wealthy US
investors from its $450m Facebook private placement deal after
questions were raised about its compliance with US securities
regulations.
The deal, which originally intended to give US
and offshore high net worth clients access to stakes in the social
networking site, will now only be offered to clients outside the
US.
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The bank cited the media furore following the
deal’s announcement earlier this month as part of the reason it had
cancelled the initiative.
Deal in breach of US law?
The deal would have also put the bank in
breach of US securities law which restricts banks promoting private
company shares.
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By GlobalDataA statement from the bank read: “The level of
media attention might not be consistent with the proper completion
of a US private placement under US law”.
“We regret the consequences of this decision,
but Goldman Sachs believes this is the most prudent path to take,”
it continued.
The bank had forecast private wealth
management clients could invest about $1.5bn in Facebook.
