NEW YORK — Goldman Sachs Group has prohibited US 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.
Goldman Sachs said yesterday it decided to restrict the fund to shareholders in Asia and Europe because it determined that the news coverage could be inconsistent with the laws that govern private placements.
In a statement, Goldman Sachs said it made the decision on its own.
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 are 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 Wall Street Journal, which reported the decision to exclude US clients from the private offering yesterday, said about $7 billion in orders have been received, citing a person who was familiar with the situation who was not identified.