Will Facebook Deal Force The SEC To Change Its Rules?
The Securities and Exchanges Commission has begun reviewing its reporting rules for private companies.
Goldman Sachs’ $450 million investment would have the giant social network to continue its growth without having having to publicly report financial information — unless the Securities and Exchanges Commission changes its rules.
That’s exactly what the SEC is considering, according to the Associated Press, which said the regulator begun reviewing its reporting rules for privately held companies.
Currently, private companies don’t have to publicly report their finances until they reach more than 500 investors. The deal between Facebook and Goldman Sachs theoretically circumvents this rule: The bank invested the money first, and is then letting its own clients invest anywhere from a mere $2 million dollars to $1.5
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