NEW YORK (AP) — Goldman Sachs Group Inc. has prohibited U.S. investors from participating in a private offering expected to raise up to $1.5 billion for social networking site Facebook, citing widespread media coverage that could run afoul of securities guidelines.
The investment bank said Monday it decided to restrict the fund to prospective shareholders in Asia and Europe because it determined that the news coverage could be inconsistent with the laws that govern private placements.READ MORE: Southern California Welcomes Autumn Rain, Cooler Temperatures
In a statement, Goldman Sachs said it made the decision on its own and “believes this is the most prudent path to take.”
Although Goldman Sachs did not specify which laws it was concerned about, the Securities and Exchange Commission has guidelines that regulate the amount of solicitation and publicity that is allowed in connection with a private placement.
The development comes after Goldman Sachs and a Russian investor invested $500 million in the privately held social networking site earlier this month. The bank set up the offshore fund, which initially was to have been available to investors in the United States.READ MORE: Federal Investigators Name MSC DANIT As 'Party In Interest' As Lawmakers Intensify Scrutiny Of Coastal Offshore Drilling
Goldman Sachs has declined to specify when the offering may close. It is expected to raise as much as $1.5 billion for the privately held Facebook, the world’s largest Internet social network.
The Wall Street Journal, which reported the decision to exclude U.S. clients from the private offering on Monday, said about $7 billion in orders have been received, citing a person who was familiar with the situation who was not identified.
Facebook founder Mark Zuckerberg, 26, has been in no hurry to take the company public, partly because he hoped to preserve a free-wheeling culture.MORE NEWS: Colin Powell, First Black Secretary Of State, Dies At 84 Of Complications From COVID-19
(© Copyright 2010 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)