The SEC is reviewing Goldman Sachs as private companies can only have 499 investors before being required to disclose financial data, whereas the investment bank wants to create a special purpose vehicle to allow any number of clients to invest up to another $1.5bn in Facebook under just one investor's name.
The US Securities and Exchange Commission (SEC) has initiated an early-stage review of investment Goldman Sachs’s $450m investment in social media group Facebook.
Goldman Sachs contributed $450m and Russia-based investment company Digital Sky Technologies (DST) contributed $50m.
The SEC is reviewing Goldman Sachs as private companies can only have 499 investors before being required to disclose financial data, whereas the investment bank wants to create a special purpose vehicle to allow any number of clients to invest up to another $1.5bn in Facebook under just one investor’s name.
While DST is in turn backed by media group Naspers’ corporate venturing unit and China’s Tencent, US software company Microsoft invested $240m for a 1.6% stake in Facebook in October 2007.